Question
Wardell Company purchased a minicomputer on January 1, 2014, at a cost of $55,000. The computer was depreciated using the straight-line method over an estimated
Wardell Company purchased a minicomputer on January 1, 2014, at a cost of $55,000. 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, 2016, the estimate of useful life was changed to a total of 10 years, and the estimate of residual value was changed to $2,800. | |
Required: |
1. | Prepare the appropriate adjusting entry for depreciation in 2016 to reflect the revised estimate. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) | |
Note: Enter debits before credits. ************ (Choose from the list below to Journalize which applies to the question)********** No journal entry required Accumulated depreciationbuilding Accumulated depreciationcomputer Accumulated depreciationequipment Accumulated depreciationmachinery Accumulatied depreciationlathe Amortization expense Building Cash Depreciation expense Equipment Franchise Gain on sale Goodwill Litigation expense Loss on impairment Loss on sale Maintenance expense Patent Plant assets Refrigerators Research and development expense Retained earnings Revaluation expense Revaluation surplusOCI |
2. | Prepare the appropriate adjusting entry for depreciation in 2016 assuming that the company uses the sum-of-the-years' -digits method instead of the straight-line method. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) | |
Note: Enter debits before credits. ************ (Choose from the list below to Journalize which applies to the question)********** No journal entry required Accumulated depreciationbuilding Accumulated depreciationcomputer Accumulated depreciationequipment Accumulated depreciationmachinery Accumulatied depreciationlathe Amortization expense Building Cash Depreciation expense Equipment Franchise Gain on sale Goodwill Litigation expense Loss on impairment Loss on sale Maintenance expense Patent Plant assets Refrigerators Research and development expense Retained earnings Revaluation expense Revaluation surplusOCI |
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