Machinery purchased for $73,800 by Blossom Co. in 2016 was originally estimated to have a life of 8 years with a salvage value of $4,920 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2021, it is determined that the total estimated life should be 10 years with a salvage value of $5,535 at the end of that time. Assume straight-line depreciation.

Required:
Prepare the entry to correct the prior years' depreciation, if necessary.

Respuesta :

Zviko

Answer:

See explanation

Explanation:

Prior year depreciation lies in the Profit Reserve called  Retained Earnings and in the Asset therefor correct Profit Balance and Asset Balances to effect this adjustment.

Depreciation Expense = (Cost - Salvage Value ) ÷ Estimated Useful Life