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Preparing an Entry for Depreciation

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Machinery purchased for $60,000 by Tom Brady Co. in 2003 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 2008, it is determined that the total estimated life should be 10 years with a salvage value of $4,500 at the end of that time. Assume straight-line depreciation.

Instructions

Prepare the entry to correct the prior years' depreciation, if necessary.
Prepare the entry to record depreciation for 2008.

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Solution Summary

This solution prepares an entry for depreciation for Tom Brady Co.

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