Depreciation expense for the most recent fiscal year on equipment purchased a few years ago is
$10,000.The balance sheet at the end of the same year disclosed the following: The asset is not expected to have a salvage value and the firm depreciates the asset on the straight-lin basis.In March of the NEXT year (the year of change), the firm decided to reduce the original total useful life 20% and that a salvage value of $30,000 is a reasonable estimate.The firm also decided that the double declining balance method is a more appropriate depreciation method for this asset.
Required:
(a)The entry to record the accounting change.
(b)The entry to record depreciation expense in the year of change.

Question

Depreciation expense for the most recent fiscal year on equipment purchased a few years ago is
$10,000.The balance sheet at the end of the same year disclosed the following:  The asset is not expected to have a salvage value and the firm depreciates the asset on the straight-lin basis.In March of the NEXT year (the year of change), the firm decided to reduce the original total useful life 20% and that a salvage value of $30,000 is a reasonable estimate.The firm also decided that the double declining balance method is a more appropriate depreciation method for this asset.
Required:
(a)The entry to record the accounting change.
(b)The entry to record depreciation expense in the year of change.

Quizplus · Accepted Answer

The Answer of Depreciation expense for the most recent fiscal year on equipment purchased a few years ago is
$10,000.The balance sheet at the end of the same year disclosed the following:  The asset is not expected to have a salvage value and the firm depreciates the asset on the straight-lin basis.In March of the NEXT year (the year of change), the firm decided to reduce the original total useful life 20% and that a salvage value of $30,000 is a reasonable estimate.The firm also decided that the double declining balance method is a more appropriate depreciation method for this asset.
Required:
(a)The entry to record the accounting change.
(b)The entry to record depreciation expense in the year of change.

Depreciation Expense for the Most Recent Fiscal Year on Equipment