The Catherine Company, effective January 1, 2018, made the following accounting change:
· Catherine changed its depreciation method from double-declining-balance to the straight-line method on equipment purchased on January 1, 2016, at a cost of $400,000. The equipment had an estimated useful life of five years and a $30,000 residual value.
Catherine is subject to an income tax rate of 30% and can justify the changes.
Required:
Calculate the following amounts:
a. 2018 depreciation expense
b. the December 31, 2018, accumulated depreciation balance on the equipment

Question

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The Answer of The Catherine Company, effective January 1, 2018, made the following accounting change:
· Catherine changed its depreciation method from double-declining-balance to the straight-line method on equipment purchased on January 1, 2016, at a cost of $400,000. The equipment had an estimated useful life of five years and a $30,000 residual value.
Catherine is subject to an income tax rate of 30% and can justify the changes.
Required:
Calculate the following amounts:
a. 2018 depreciation expense
b. the December 31, 2018, accumulated depreciation balance on the equipment

The Catherine Company, Effective January 1, 2018, Made the Following