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1. Depreciation-Change in Estimate Machinery purchased for $52,000 by Carver Co. in 2006 was originally estimated to have a life of 8 years with a salvage value of $4,000 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2011, it is determined that the total estimated life should be 10 years with a salvage value of $4,500 at the end of that time. Assume straight-line depreciation.
(a) Prepare the entry to correct the prior years' depreciation, if necessary.
(b) Prepare the entry to record depreciation for 2011.
In what situation would the Athena controller be correct in her valuation of goodwill?
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