Answer:
a. Compute the amount of depreciation expense recorded in the prior year.
b. Compute the book value of the printing press at the end of the prior year.
c. Compute the amount of depreciation that should be recorded in the current year.
d. Prepare the adjusting entry for depreciation at December 31 of the current year.
- December 31, 202x, depreciation expense
- Dr Depreciation expense 8,762.50
- Cr Accumulated depreciation - Didde press 8,762.50
Explanation:
depreciation expense per year of Didde press = ($330,000 - $43,000) / 20 years = $14,350 per year
accumulated depreciation = 5 years x $14,350 = $71,750
net book value = $258,250
adjusted useful life of 25 years, 20 remaining
new residual value of $83,000
depreciation expense per year = ($258,250 - $83,000) / 20 years = $8,762.50 per year
