Current Attempt in ProgressMachinery purchased for $60,000 by Tom Brady Co. in 2021 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 2026, it is determined that the totalestimated life should be 10 years with a salvage value of $4,500 at the end of that time. Assume straight-line depreciation. CPrepare the entry to correct the prior years' depreciation, if necessary. (If no entry is required, select "No entry" for the account titlesand enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List debitentry before credit entry.)Account Titles and ExplanationDepreciation ExpenseAccumulated Depreciation - BuildingseTextbook and MediaSolutionDebitO0CreditAssistance UsedNo correcting entry is necessary because changes in estimate are handled in the current and prospective periods.

The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage…

Answered: Prepare the entry to correct the prior…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Current Attempt in Progress
Machinery purchased for $60,000 by Tom Brady Co. in 2021 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 2026, 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.

C
Prepare the entry to correct the prior years' depreciation, if necessary. (If no entry is required, select "No entry" for the account titles
and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List debit
entry before credit entry.)
Account Titles and Explanation
Depreciation Expense
Accumulated Depreciation - Buildings
eTextbook and Media
Solution
Debit
O
0
Credit
Assistance Used
No correcting entry is necessary because changes in estimate are handled in the current and prospective periods.

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