Depreciation Calculation: Change in Useful Life and Salvage Value
October 2nd, 2022
Machinery purchased for $60,000 by Tom Brady Co. in 2003 (Joe Montana Co. in 2000) was originally estimated to have a life of 8 years with a salvage value of $4,000 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2008, it is determined that the total estimated life should be 10 years with a salvage value of $4,500 at the end of that time. Assume straight-line depreciation. Prepare the entry to correct the prior years’ depreciation, if necessary. Prepare the entry to record depreciation for 2008.