Buckeye Company purchased a machine on January 1, 2011. The machine had a cost of $260,000 with a $10,000 residual value. The estimated useful life of the machine was eight years. On January 1, 2013, due to technological innovations, the estimated useful life was reduced by two years from the original life and the residual value was reduced by 50%. The company also decided to switch to the sum of the year's digits rather than the method they have used up to this point (straight-line depreciation).

A) Prepare the journal entry to record the annual depreciation on December 31, 2013.

B) What would the entry be if the company continued to utilize the straight line method?

Answer rating: 100% (QA)

A Depreciation Dr 485714 To Machine 485714 Being depreciation charged on machine as p... View the full answer