Question

Machinery purchased for $72,000 by Oriole Co. in 2016 was originally estimated to have a life of 8 years with a salvage value of $4,800 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 $5,400 at the end of that time. Assume straight-line depreciation.

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

Answer 1

No journal entry would be recorded

Step-by-step explanation:

The journal entry is shown below:

No journal entry would be recorded for recognizing the prior year depreciation

So no journal entry would be passed for the same

Hence, the same would be relevant