(Depreciation–Change in Estimate)

Machinery purchased for $63,440 by Carver Co. in 2006 was originally estimated to have a life of 8 years with a salvage value of $4,880 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2011, it is determined that the total estimated life should be 10 years with a salvage value of $5,490 at the end of that time. Assume straight-line depreciation. (a) Is it necessary to do an entry to correct the prior years’ depreciation? (b) Prepare the entry to record depreciation for 2011. Description/Account Debit Credit AE11-11 Incorrect. (Depreciation–Change in Estimate) Machinery purchased for $63,440 by Carver Co. in 2006 was originally estimated to have a life of 8 years with a salvage value of $4,880 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2011, it is determined that the total estimated life should be 10 years with a salvage value of $5,490 at the end of that time. Assume straight-line depreciation. (a) Is it necessary to do an entry to correct the prior years’ depreciation? (b) Description/Account Prepare the entry to record depreciation for 2011. Debit