ACC 323 Ch 20: Change in Depreciation Estimates Fun Company purchased equipment on 1/1/Y1 for $20,000. At that time, management estimated the equipment would be useful for 10 years and have a residual value of $2,000. Fun Company uses straight line to depreciate all of their PP\&E. On 6/15//6 management changed the estimated total useful life of this asset to 7 years and changed the estimated residual value to $1,000. Fun records depreciation at the end of each month. Calculate depreciation expense for this asset for Year 1. Dep. Exp. ($20,000$2,000)/10 years $1,800 Prepare the regular year 1 end-of-month SL depreciation JE for this asset. $1,800/12 months $150/ month Depreciation Expense 150 Accumulated Depreciation 150 Calculate the book value of this asset at the point in time the change in estimates took effect. 11,000 Calculate depreciation expense for this asset for Year 6. 5,000 Prepare the AJE needed on 6/30//6 for this asset. Prepare the new regular end-of-month SL depreciation JE for this asset beginning 7/31/I6