Corning
Corporation purchased a computer system for $60,000 on January 1, 2010. It was
depreciated based on a seven-year life and an $18,000 residual value. On
January 1, 2012, Corning revised these estimates to a total useful life of four
years and a residual value of $10,000. Prepare Corning’s entry to record 2012
depreciation expense. Assume that Corning follows IFRS and uses straight-line
depreciation.
Depreciation Expense..................... 19,000
Accumulated
Depreciation............. 19,000
Carrying amount: = $60,000 – 2 X (60,000 – 18,000) /
7 = $48,000
New annual depreciation: (48,000 - 10,000 / 4-2)= $19,000
