11. (Depreciation-Change in Estimate) Machinery purchased for $60,000 by Joe Montana
Co. in 2000 was originally estimated to have a life of 8 years with a salvage value of
$4,000 at the end of that time. Depreciation has been entered for 5 years on this basis.
In 2005, it is determined that the total estimated life (including 2005) should be 10 years
with a salvage value of $4,500 at the end of that time. Assume straight-line depreciation.
a. Prepare the entry to correct the prior years' depreciation, if necessary.
b. Prepare the entry to record depreciation for 2005.
The solution explains how to calculate the revised depreciation if there is a change in estimate