On January 1, 2014, Dawn Company bought a machine for $60,000. It was then estimated that the useful life of the machine would be eight years with a salvage value of $8,000. On January 1, 2018, it was decided that the machine's total life from acquisition date should have been only six years with a salvage value of only $2000. The company used straight-line depreciation.
Required:
a.If an adjusting entry is necessary on January 1, 2018, prepare it.
b.Compute depreciation expense for 2018.

Question

On January 1, 2014, Dawn Company bought a machine for $60,000. It was then estimated that the useful life of the machine would be eight years with a salvage value of $8,000. On January 1, 2018, it was decided that the machine's total life from acquisition date should have been only six years with a salvage value of only $2000. The company used straight-line depreciation.
Required: 
a.If an adjusting entry is necessary on January 1, 2018, prepare it.
b.Compute depreciation expense for 2018.

Quizplus · Accepted Answer

The Answer of On January 1, 2014, Dawn Company bought a machine for $60,000. It was then estimated that the useful life of the machine would be eight years with a salvage value of $8,000. On January 1, 2018, it was decided that the machine's total life from acquisition date should have been only six years with a salvage value of only $2000. The company used straight-line depreciation.
Required: 
a.If an adjusting entry is necessary on January 1, 2018, prepare it.
b.Compute depreciation expense for 2018.

On January 1, 2014, Dawn Company Bought a Machine for $60,000