Via Rio Co. purchased equipment for $1,000,000 which was estimated to have a useful life of 15

Question:

Via Rio Co. purchased equipment for $1,000,000 which was estimated to have a useful life of 15 years with a of $25,000 at the end of that time. Depreciation has been entered for 5 years on a straight-line basis. In 2015, it is determined that the total estimated life should be 10 years with no at the end of that time.

Instructions
(a) Prepare the entry (if any) to correct the prior years’ depreciation.
(b) Prepare the entry to record depreciation for 2015.

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...