Wardell Company purchased a minicomputer on January 1, 2022, at a cost of $40,000. The computer was
Question:
Wardell Company purchased a minicomputer on January 1, 2022, at a cost of $40,000. The computer was depreciated using the straight-line method over an estimated five-year life with an estimated residual value of $4,000. On January 1, 2024, the estimate of useful life was changed to a total of 10 years, and the estimate of residual value was changed to $900.
Required:
1. Prepare the year-end journal entry for depreciation on December 31, 2024. No depreciation was recorded during the year.
2. Repeat requirement 1, assuming that the company uses the double-declining-balance method instead of the straight-line method.
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