Problem:
Machinery purchased for $ 60,000 by Tom Brady Co. in 2010 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 2015, 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.
Required:
Question 1: Prepare the entry to correct the prior year's depreciation, if necessary
Question 2: Prepare the entry to record depreciation for 2015
Note: Provide support for your rationale.