Mendelsohn Company purchased equipment on January 1, 2021 at a cost of $ 48,000. The equipment is expected to have an estimated residual value of $ 3,000 at the end of its 5-year life. The company's new accountant has used the double diminishing-balance method to depreciate the equipment at December 31, 2021. However, the company has a policy of using the straight-line method to depreciate equipment. Profit for the year ended December 31, 2021 was $ 55,000 as the result of depreciating the equipment incorrectly.
Instructions
Using the method of depreciation which the company normally follows, prepare the correcting entry and determine the corrected profit. (Show calculations.)

Question

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The Answer of Mendelsohn Company purchased equipment on January 1, 2021 at a cost of $ 48,000. The equipment is expected to have an estimated residual value of $ 3,000 at the end of its 5-year life. The company's new accountant has used the double diminishing-balance method to depreciate the equipment at December 31, 2021. However, the company has a policy of using the straight-line method to depreciate equipment. Profit for the year ended December 31, 2021 was $ 55,000 as the result of depreciating the equipment incorrectly.
Instructions
Using the method of depreciation which the company normally follows, prepare the correcting entry and determine the corrected profit. (Show calculations.)

Mendelsohn Company Purchased Equipment on January 1, 2021 at a Cost