Using the information in BE21- 7, prepare the footnote to disclose the change in accounting estimate for Enko Incorporated
In BE21-7
The asset’s original cost was $ 750,000. There is a $ 50,000 expected residual value and the estimated useful life is 20 years. At the beginning of the current year, following 10 full years of depreciation, the company determined that the asset will only be useful for another five years and reduced the expected residual value to $ 30,000. The change in estimate is needed to reflect advanced technology used in newer equipment currently available on the market. Enko uses the straight-line method of depreciation. Prepare the journal entry to record the change in estimate, ignoring any tax effects.