FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Recording Depreciation with a Change in Depreciation Method
Pier Exports purchases equipment on January 1 at a cost of $225,000. The company estimates that there will be no salvage value and that the equipment will have a useful life of 10 years. The company elects to use the double-declining-balance method for the first
three years, after which the company will change to the straight-line method of depreciation for the equipment.
Required
a. Compute annual depreciation expense for Year 1 through Year 3.
b. Prepare the depreciation entry for the end of Year 4.
Note: Round your final answers to the nearest whole number.
a.
Year Annual depreciation expense
Year 1 $
Year 2 $
Year 3 $
b.
Date
Dec. 31, Year 4
Account Name
To record depreciation.
<
>
Dr.
Cr.
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Transcribed Image Text:Recording Depreciation with a Change in Depreciation Method Pier Exports purchases equipment on January 1 at a cost of $225,000. The company estimates that there will be no salvage value and that the equipment will have a useful life of 10 years. The company elects to use the double-declining-balance method for the first three years, after which the company will change to the straight-line method of depreciation for the equipment. Required a. Compute annual depreciation expense for Year 1 through Year 3. b. Prepare the depreciation entry for the end of Year 4. Note: Round your final answers to the nearest whole number. a. Year Annual depreciation expense Year 1 $ Year 2 $ Year 3 $ b. Date Dec. 31, Year 4 Account Name To record depreciation. < > Dr. Cr.
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