Machinery purchased for $42,400 by Cheyenne Corp. on January 1, 2018, was originally estimated to have an 8-year useful life with residual value of $4,000. Depreciation has been entered for five years on this basis. In 2023, it is determined that the total estimated useful life (including 2023) should have been 10 years, with a residual value of $5,000 at the end of that time. Assume straight-line depreciation and that Cheyenne uses IFRS for financial statement purposes. (a) Prepare the entry that is required to correct the prior years' depreciation, if any. (Credit account titles are automatically indented when the amount is enteled. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry)
Machinery purchased for $42,400 by Cheyenne Corp. on January 1, 2018, was originally estimated to have an 8-year useful life with residual value of $4,000. Depreciation has been entered for five years on this basis. In 2023, it is determined that the total estimated useful life (including 2023) should have been 10 years, with a residual value of $5,000 at the end of that time. Assume straight-line depreciation and that Cheyenne uses IFRS for financial statement purposes. (a) Prepare the entry that is required to correct the prior years' depreciation, if any. (Credit account titles are automatically indented when the amount is enteled. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Machinery purchased for $42,400 by Cheyenne Corp. on January 1, 2018, was originally estimated to have an 8-year useful life with a
residual value of $4,000. Depreciation has been entered for five years on this basis. In 2023, it is determined that the total estimated
useful life (including 2023) should have been 10 years, with a residual value of $5,000 at the end of that time. Assume straight-line
depreciation and that Cheyenne uses IFRS for financial statement purposes.
(a)
Prepare the entry that is required to correct the prior years' depreciation, if any. (Credit account titles are automatically indented
when the amount is enteled. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the
amounts. List debit entry before credit entry.)
Account Titles and Explanation
Debit
Credit
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