Final answer:
To calculate the year-end journal entry for depreciation using the double-declining balance method for a computer with a revised total useful life of 10 years and a new salvage value, begin by finding the book value at the beginning of the year and then apply the double-declining balance rate to it. The depreciation expense for 2024 is calculated as 25% of the book value, which is $10,300.
Step-by-step explanation:
To calculate the year-end journal entry for depreciation on December 31, 2024, assuming the use of the double-declining balance method instead of the straight-line method, we first need to determine the book value of the computer at the beginning of 2024. The original cost of the minicomputer was $58,000 and it was initially depreciated over 5 years with a salvage value of $16,000. For two years (2022 and 2023), the annual depreciation using the straight-line method would have been (original cost - salvage value) / life in years, which equals ($58,000 - $16,000) / 5 = $8,400 per year. So, by the start of 2024, accumulated depreciation is $8,400 ×2 = $16,800.
The book value at the beginning of 2024 before the adjustment is $58,000 - $16,800 = $41,200. With the revision in estimated total useful life to 10 years and residual value to $2,200, the book value minus revised salvage value at the start of 2024 will be spread over the remaining revised life of the computer, which is now 10 - 2 = 8 years. Thus, for 2024, the straight-line depreciation expense would be ($41,200 - $2,200) / 8 = $4,875.
However, since we need to use the double-declining balance method, we double the straight-line depreciation rate. The straight-line rate for the remainder of the useful life would be 1 / 8 = 12.5%, thus the double-declining balance rate is 25%. The depreciation expense for 2024 using this method is 25% of the book value at the beginning of 2024, which is 25%× $41,200 = $10,300.
The journal entry for depreciation on December 31, 2024 would be:
Debit: Depreciation Expense $10,300
Credit: Accumulated Depreciation $10,300