Following an internal audit of Wilkinson Limited, a manufacturing company for the year 2023, the following items were brought to the attention of the Accountant. The Accountant is unsure how to proceed. She has hired you as a consultant to assist her.1. Wilkinson Company changed depreciation methods in 2023 from doubledeclining-balance to straight-line. The accumulated depreciation prior to 2023 under double-declining-balance was $90,000, whereas the straight-line accumulated depreciation prior to 2023 would have been $50,000. Wilkinson’s depreciable assets had a cost of $250,000, with a $40,000 residual value and an 8-year remaining useful life at the beginning of 2023. Requirements:I. Discuss the appropriate accounting treatment for the above. II. Prepare the 2023 journal entry related to the depreciable assets , if necessary. Ignore income tax effects
Following an internal audit of Wilkinson Limited, a manufacturing company for the
year 2023, the following items were brought to the attention of the Accountant. The
Accountant is unsure how to proceed. She has hired you as a consultant to assist
her.
1. Wilkinson Company changed depreciation methods in 2023 from doubledeclining-balance to straight-line. The
under double-declining-balance was $90,000, whereas the straight-line
accumulated depreciation prior to 2023 would have been $50,000. Wilkinson’s
8-year remaining useful life at the beginning of 2023.
Requirements:
I. Discuss the appropriate accounting treatment for the above.
II. Prepare the 2023
necessary. Ignore income tax effects
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