Question 3 10 Points Nanki Corporation purchased equipment o

Question 3: 10 Points Nanki Corporation purchased equipment on January 1, 2016, for $640,000. In 2016 and 2017, Nanki depreciated the asset on a straight-line basis with an estimated useful life of ten years and a $10,000 residual value. In 2018, due to changes in technology, Nanki revised the useful life to a total of eight years with no residual value. What depreciation would Nanki record for the year 2018 on this equipment - show the journal entry to record the depreciation? ccountDr.lCr. Calculations:

Solution

Straight line depreciation for first 2 years = (640000-10000)/10= $63000 Book value at the end of 2017 = 640000-(63000*2)= $514000 Depreciation for 2018 = 514000/6= $85666.67 or $85667 Depreciation expense 85667        Accumulated depreciation-Equipment 85667