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Annual depreciation expense on equipment purchased a few years ago (using the straight-line method0 is $5,000. The cost of the equipment was $100,000....
Annual depreciation expense on equipment purchased a few years ago (using the straight-line method0 is $5,000. The cost of the equipment was $100,000. The current book value of the equipment (January 1, 2009) is $85,000. At the time of purchase, the asset was estimated to have a zero slvage value. On January 1, 2009, the company decided to reduce the original useful life by 25% and to establish a salvage value of $5,000. The firm also decided double-declining-balance depreciation was more appropirate. Ignore tax effects.Reqired:1. Record the journal entry, if any, to report the accouting change.2. Record the annual depreciation for 2009.
