Machinery purchased for $41,200 by Swifty Corp. on January 1,2015, was originally estimated to have an 8-year useful life with aresidual value of $6,000. Depreciation has been entered for fiveyears on this basis. In 2020, it is determined that the totalestimated useful life (including 2020) should have been 10 years,with a residual value of $7,000 at the end of that time. Assumestraight-line depreciation and that Swifty Corp. uses IFRS forfinancial statement purposes.
Prepare the entry that is required to correct the prior years’depreciation, if any
Prepare the entry to record depreciation for 2020.
Repeat part (b) assuming Swifty Corp. uses ASPE and themachinery is originally estimated to have a physical life of 8.5years and a salvage value of $0. In 2020, it is determined that thetotal estimated physical life (including 2020) should have been 11years, with a salvage value of $400 at the end of that time.
Repeat part (b) assuming Swifty Corp. uses thedouble-declining-balance method of depreciation.
