A Company Entered into the Following Transactions Concerning Its Computer

question 8

Essay

A company entered into the following transactions concerning its computer system:
On January 1,2009 purchased a computer system that cost $1,480,000.The estimated useful life of the computer is 3 years and salvage value is $40,000.Straight-line depreciation is to be used.On January 1,2010 the company determined that the estimated useful life of the computer would be 4 years instead of 3 years.The estimated salvage value will only be $10,000.
a. Prepare the journal entry to record depreciation expense for 2010.
b. Prepare the journal entry to record depreciation expense for 2010.

---

Definitions:

AASB 11

is an accounting standard that deals with the financial reporting of interests in joint arrangements.

Joint Operations

A business activity in which two or more parties share control and are jointly responsible for management, assets, and liabilities associated with the activity.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a company's assets over their useful lives, reducing their book value.

Initial Investment

The amount of money used to start an investment, often the starting capital for a business or financial venture.