Wildhorse Co. bought equipment for $130000 on January 1, 2016. Wildhorse estimated the useful life to be 10 years with no salvage value, and the straight-line method of depreciation will be used. On January 1, 2017, Wildhorse decides that the business will use the equipment for a total of 11 years. What is the revised depreciation expense for 2017?

Wildhorse Co. bought equipment for $130000 on January 1, 2016. Wildhorse estimated the useful life to be 10 years with no salvage value, and the straight-line method of depreciation will be used. On January 1, 2017, Wildhorse decides that the business will use the equipment for a total of 11 years. What is the revised depreciation expense for 2017?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 11E: On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an...

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On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an estimated life of 20 years and an estimated residual value of 20,000. The company has been depreciating the building using straight-line depreciation. At the beginning of 2020, the following independent situations occur: a. The company estimates that the building has a remaining life of 10 years (for a total of 16 years). b. The company changes to the sum-of-the-years-digits method. c. The company discovers that it had ignored the estimated residual value in the computation of the annual depreciation each year. Required: For each of the independent situations, prepare all journal entries related to the building for 2020. Ignore income taxes.
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