Equipment Was Acquired on January 1, 2011, at a Cost

question 109

Essay

Equipment was acquired on January 1, 2011, at a cost of $170,000. The equipment was originally estimated to have a salvage value of $10,000 and an estimated life of 10 years. Depreciation has been recorded through December 31, 2013, using the straight-line method. On January 1, 2014, the estimated salvage value was revised to $16,000 and the useful life was revised to a total of 8 years.
Instructions
Determine the depreciation expense for 2014.

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Definitions:

Income Statement

A financial document that shows a company's revenues, expenses, and net income over a certain period of time.

Adjusted Trial Balance

A list of all the accounts of a company, showing the balance of each after adjustments have been made for journal entries, typically used in the preparation of financial statements.

Debit Column Total

Represents the total sum of all debit entries within a specific period in accounting, which are recorded on the left-hand side of the ledger.

Balance Sheet Columns

Sections within a balance sheet representing assets, liabilities, and shareholders' equity at a specific point in time.