Machinery purchased for $63,000 by Concord Co. in 2016 was originally estimated to have a life of 8 years with a salvage value of $4,200 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2021, it is determined that the total estimated life should be 10 years with a salvage value of $4,725 at the end of that time. Assume straight-line depreciation.
Required:
1. Prepare the entry to correct the prior years' depreciation, if necessary.
2. Prepare the entry to record depreciation for 2021.

Correction entry.

1.Credit accumulated depreciation $7612.50

Debit Asset/machinery               $7612.50

2. Credit Asset / Machinery $5827.5

Debit Accumulated depreciation $5827.50

Explanation:

Cost of machine = $63000

Useful life = 8yrs

Salvage value = $ 4200

Depreciable amount on this basis $(63000-4200)=58800

Annual depreciation =58800/8 =7350

5yrs depreciation = 7350 *5=$36750.

Revised Useful life - 10yrs

Revised Salvage value = $4725

Revised depreciable amount = $58275

Annual depreciation = 58275/10 =$5,827.50

5yrs depreciation = $29,137.50

Difference in accumulated depreciation = $36750-$29137.5

$7612.50

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.