Corning Corporation purchased a computer system for $60,000 on January 1, 2010

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