The accumulated depreciation account has a balance
Course:- Accounting Basics
Reference No.:- EM13866193

Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Accounting Basics

During 2010, the controller of the Ryel Company asked you to prepare correcting journal entries for the following three situations:
1. Machine A was purchased for $50,000 on January 1, 2005. Straight line depreciation has been recorded for five years, and the Accumulated Depreciation account has a balance of $25,000. The estimated residual value remains at $5,000, but the service life is now estimated to be one year longer than estimated originally.
2. Machine B was purchased for $40,000 on January 1, 2008. It had an estimated residual value of $5,000 and an estimated service life of 10 years. It has been depreciated under the double declining balance method for two years. Now, at the beginning of the third year, Ryel has decided to change to the straight-line method.
3. Machine C was purchased for $20,000 on January 1, 2009. Double-declining-balance depreciation has been recorded for one year. The estimated residual value of the machine is $2,000 and the estimated service life is five years. The computation of the depreciation erroneously included the estimated residual value.

Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry necessary for each situation to record the depreciation for 2010. (Assume that the debit is to Depreciation Expense.)

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Accounting Basics) Materials
Tanzlin Manufacturing's common stock has a beta of 1.5. If the expected risk-free return is 9% and the expected return on the market is 14%, what is the expected return on
Shipyard Corp. acquired Boatworks Corp. in a Type A reorganization on October 19, 2011. On the date of acquisition, Boatworks had a deficit in its earnings and profits of $3
A corporation sold 14,000 shares of its $10 par value common stock at a cash price of $13 per share. The entry to record this transaction would include:
Molly Grey (single) acquired a 30 percent limited partnership interest in Beau Geste LLP several years ago for $56,000. At the beginning of year 1, Molly has tax basis and an
The requirement analysis process is so difficult because this is the beginning of the process. Oftentimes, this step becomes a mess because the person may not understand the
Assume the British pound appreciates against the dollar while the Japanese yen depreciates against the dollar. Which of the following is true?
Rank the following financial instruments in terms of their safety and liquidity:-  U.S. T-bills,  Large negotiable CDs, Mortgages, Government bonds, Government agency securiti
What evidence would help you evaluate whether or not a company does adequate cash planning? - Is there any information not available in the company's annual report that would