Indigo Company is in the process of preparing its financial statements for 2017. Assume that no entries for depreciation have been recorded in 2017. The following information related to depreciation of fixed assets is provided to you. 1. Indigo purchased equipment on January 2, 2014, for $92,900. At that time, the equipment had an estimated useful life of 10 years with a $4,900 salvage value. The equipment is depreciated on a straight-line basis. On January 2, 2017, as a result of additional information, the company determined that the equipment has a remaining useful life of 4 years with a $2,900 salvage value. 2. During 2017, Indigo changed from the double-declining-balance method for its building to the straight-line method. The building originally cost $280,000. It had a useful life of 10 years and a salvage value of $28,000. The following computations present depreciation on both bases for 2015 and 2016. 2015 Straight-line Declining-balance 2016 $25,200 44,800 $25,200 56,000 3. Indigo purchased a machine on July 1, 2015, at a cost of $130,000. The machine has a salvage value of $20,000 and a useful life of 8 years. Indigo's bookkeeper recorded straight-line depreciation in 2015 and 2016 but failed to consider the salvage value. (a) Your answer is partially correct. Try again. Prepare the journal entries to record depreciation expense for 2017 and correct any errors made to date related to the information provided. (Ignore taxes.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) No. Account Titles and Explanation Debit Credit Prepare the journal entries to record depreciation expense for 2017 and correct any errors made to date related to the information provided. (Ignore taxes.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Debit Credit No. Account Titles and Explanation 1. Depreciation Expense 14675 Accumulated Depreciation-Equipment 14675 2. Yoepreciation Expense Accumulated Depreciation-Building 3. Accumulated Depreciation Machinery Accumulated Depreciation-Building 25200 L 2 13750 T 5200 Retained Earnings 13750 (To record current year depreciation.) Depreciation Expense Accumulated Depreciation-Machinery 980 (To correct prior year depreciation.)