The Catherine Company, effective January 1, 2016, 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, 2014, 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.2016 depreciation expense
b.the December 31, 2016, accumulated depreciation balance on the equipment

Question

The Catherine Company, effective January 1, 2016, 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, 2014, 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.2016 depreciation expense
b.the December 31, 2016, accumulated depreciation balance on the equipment

Quizplus · Accepted Answer

The Answer of The Catherine Company, effective January 1, 2016, 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, 2014, 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.2016 depreciation expense
b.the December 31, 2016, accumulated depreciation balance on the equipment

The Catherine Company, Effective January 1, 2016, Made the Following