On January 1, 1999, a Company Purchased a Machine That

question 5

Essay

On January 1, 1999, a company purchased a machine that cost $12,000. It was depreciated for 1999, 2000, and 2001, using the straight-line method, on the basis of a 5 year estimated useful life and no residual value. During early 2002, the estimated total useful life was changed to 7 years with an $800 residual value at the end of year 7.
(a) Give any entry required during 2002 to reflect the change (if none explain why).
(b) Give the adjusting entry required on December 31, 2002.

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Definitions:

Account Analysis

The examination and evaluation of a customer's account(s) to understand financial activity and offer tailored advice or products.

Life Insurance Industry

The sector of finance that deals with products and services designed to provide financial security in the event of death or other contingencies.

Sales Territory

A specific geographic area or group of customers assigned to a salesperson or team for purposes of marketing, sales, and service.

Sales Call Allocation

The distribution or assignment of sales efforts and resources among different tasks, territories, or potential clients to maximize efficiency and outcomes.