A Large Lathe Was Bought on January 1, 2019 for $15,000,000

question 65

Essay

A large lathe was bought on January 1, 2019 for $15,000,000. It was expected to last for 12 years and have a residual value of $300,000. The company uses straight-line depreciation. At the beginning of 2024, the remaining useful life of the lathe was revised to be four more years (for nine years in total). Management also felt that all equipment should now be depreciated using the declining balance method at a 25% rate. The company has a December 31 year-end.
Required: Prepare the entries to record depreciation for 2019 and 2024.

---

Definitions:

Observable Object

Any entity or phenomenon that can be perceived or measured by human senses or instruments.

Forces

Influences or powers that cause an object to move or change, or metaphorically, factors that drive or influence events or decisions.

Role of Power

The influence or control exercised by an individual or group in various contexts, affecting decisions, actions, and outcomes within societies or organizations.

Social Rule

An established and accepted standard of behavior expected within a society or community.