E11.11 (LO 1, 2) (Depreciation-Change in Estimate) Machinery purchased for $52,000 by Carver Co. in 2018 was originally estimated to have a life of 8 years with a residual value of $4,000 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2023, it is determined that the total estimated life should be 10 years with a residual value of $4,500 at the end of that time. Assume straight-line depreciation. Instructions a. Prepare the entry to correct the prior years' depreciation, if necessary. b. Prepare the entry to record depreciation for 2023. EXERCISE 11.11 (10-15 minutes) (a) No correcting entry is necessary because changes in estimate are handled in the current and prospective periods. (b) Revised annual charge Book value as of 1/1/2024 [$52,000 - (*$6,000 5)] = $22,000 Remaining useful life, 5 years (10 years - 5 years) Revised residual value, $4,500 ($22,000 $4,500) + 5 = $3,500 Depreciation Expense...... ...........3,500 Accumulated Depreciation-Equipment............ 3,500

E11.11 ( LO1,2) (Depreciation-Change in Estimate) Machinery purchased for $52,000 by Carver Co. in 2018 was originally estimated to have a life of 8 years with a residual value of $4,000 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2023, it is determined that the total estimated life should be 10 years with a residual value of $4,500 at the end of that time. Assume straight-line depreciation. Instructions a. Prepare the entry to correct the prior years' depreciation, if necessary. b. Prepare the entry to record depreciation for 2023 . EXERCISE 11.11 (10-15 minutes) (a) No correcting entry is necessary because changes in estimate are handled in the current and prospective periods. (b) Revised annual charge Book value as of 1/1/2024[$52,000($6,0005)]=$22,000 Remaining useful life, 5 years ( 10 years -5 years) Revised residual value, $4,500 ($22,000$4,500)5=$3,500 Depreciation Expense 3,500 Accumulated Depreciation-Equipment. 3,500