Wardell Company purchased a mini computer on January 1, 2019, at a cost of $42,550. The comp depreciated using the straight-line method over an estimated five-year useful life with an estimate $4,300. On January 1, 2021, the estimate of useful life was changed to a total of 10 years, and the value was changed to $930.
Wardell Company purchased a mini computer on January 1, 2019, at a cost of $42,550. The comp depreciated using the straight-line method over an estimated five-year useful life with an estimate $4,300. On January 1, 2021, the estimate of useful life was changed to a total of 10 years, and the value was changed to $930.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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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Question
A
![!
2. Prepare the appropriate adjusting entry for depreciation in 2021 to reflect the revised estimate, assuming that the company uses the
sum-of-the-years'-digits method instead of the straight-line method. (If no entry is required for a transaction/event, select "No journal
entry required" in the first account field. Do not round intermediate calculations and round your final answers to nearest whole
dollar.)
No
Required information
[The following information applies to the questions displayed below.]
Wardell Company purchased a mini computer on January 1, 2019, at a cost of $42,550. The computer has been
depreciated using the straight-line method over an estimated five-year useful life with an estimated residual value of
$4,300. On January 1, 2021, the estimate of useful life was changed to a total of 10 years, and the estimate of residual
value was changed to $930.
1
Event
1
X Answer is complete but not entirely correct.
General Journal
Depreciation expense
Accumulated depreciation
> >
Debit
2,716 X
Credit
2,716 X](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F71f909d2-f9ee-4c2e-b6a6-a27444629b23%2F73ea10b8-0dad-4181-9579-52bd3bb79cb9%2Fmz8fc5_processed.png&w=3840&q=75)
Transcribed Image Text:!
2. Prepare the appropriate adjusting entry for depreciation in 2021 to reflect the revised estimate, assuming that the company uses the
sum-of-the-years'-digits method instead of the straight-line method. (If no entry is required for a transaction/event, select "No journal
entry required" in the first account field. Do not round intermediate calculations and round your final answers to nearest whole
dollar.)
No
Required information
[The following information applies to the questions displayed below.]
Wardell Company purchased a mini computer on January 1, 2019, at a cost of $42,550. The computer has been
depreciated using the straight-line method over an estimated five-year useful life with an estimated residual value of
$4,300. On January 1, 2021, the estimate of useful life was changed to a total of 10 years, and the estimate of residual
value was changed to $930.
1
Event
1
X Answer is complete but not entirely correct.
General Journal
Depreciation expense
Accumulated depreciation
> >
Debit
2,716 X
Credit
2,716 X
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