E11-11

(Depreciation - Change in Estimate)

Machinery purchased for $60,000 by Tom Brady Co. in 2003 wasoriginally estimated to have a life of 8 years with a salvage valueof $40,000 at the end of that time. Depreciation has beenentered for 5 years on this basis. In 2008, it is determinedthat the total estimated life should be 10 years with a salvagevalue of $4,500 at the end of that time. Assume thestraight-line method.

a.) Prepare the entry to correct the prior years'depreciation, if necessary

b.) Prepare the entry to record depreciation for 2008.