using the straight-line method over an estimated five-year life with an estimated residual value of $3,000. On January 1, 2024, the estimate of useful life was changed to a total of 10 years, and the estimate of residual value was changed to $600.
using the straight-line method over an estimated five-year life with an estimated residual value of $3,000. On January 1, 2024, the estimate of useful life was changed to a total of 10 years, and the estimate of residual value was changed to $600.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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h1
![!
Required information
[The following information applies to the questions displayed below.]
Wardell Company purchased a minicomputer on January 1, 2022, at a cost of $51,000. The computer was depreciated
using the straight-line method over an estimated five-year life with an estimated residual value of $3,000. On January 1,
2024, the estimate of useful life was changed to a total of 10 years, and the estimate of residual value was changed to
$600.
2. Prepare the year-end journal entry for depreciation on December 31, 2024. Assume that the company uses the double-declining-
balance method instead of the straight-line method.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round
intermediate calculations. Round your final answers to nearest whole dollar.
1
Answer is complete but not entirely correct.
No
Event
General Journal
Debit
Credit
1
Depreciation expense
8,160 x
Accumulated depreciation-computer
8,160 ×](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff4f6f42a-fa8b-4fab-b0ef-0bdbea8ab6ca%2F18c0195b-1967-4ad5-b39d-63beb2092a55%2F0m6e1tj_processed.png&w=3840&q=75)
Transcribed Image Text:!
Required information
[The following information applies to the questions displayed below.]
Wardell Company purchased a minicomputer on January 1, 2022, at a cost of $51,000. The computer was depreciated
using the straight-line method over an estimated five-year life with an estimated residual value of $3,000. On January 1,
2024, the estimate of useful life was changed to a total of 10 years, and the estimate of residual value was changed to
$600.
2. Prepare the year-end journal entry for depreciation on December 31, 2024. Assume that the company uses the double-declining-
balance method instead of the straight-line method.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round
intermediate calculations. Round your final answers to nearest whole dollar.
1
Answer is complete but not entirely correct.
No
Event
General Journal
Debit
Credit
1
Depreciation expense
8,160 x
Accumulated depreciation-computer
8,160 ×
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