Machinery purchased for $56,000 by Wong Corp. on January 1, 2009, was originally estimated to have an eight-year useful life with a residual value of $4,000. Depreciation has been entered for five years on this basis. In 2014, it is determined that the total estimated useful life (including 2014) should have been 10 years, with a residual value of $4,500 at the end of that time. Assume straight-line depreciation.
Instructions
(a) Prepare the entry that is required to correct the prior years' depreciation, if any.
(b) Prepare the entry to record depreciation for 2014.
(c) Repeat part (b) assuming Wong Corp. uses the double-declining-balance method of depreciation.