Sunny Corp, changed from the straight-line method to the double-declining-balance method in 2026 on all its equipment. There was no change in the salvage values or useful lives. The equipment was purchased in 2025, and the original cost was $513,000 with no salvage value and a 6-year estimated useful life. Income before depreciation expense was $568,000 in 2025 and $831,000 in 2026. Sunny's tax rate is 20%. (a) Prepare the journal entry to record depreciation in 2026. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry) Account Titles and Explanation Debit Credit

Sunny Corp, changed from the straight-line method to the double-declining-balance method in 2026 on all its equipment. There was no change in the salvage values or useful lives. The equipment was purchased in 2025, and the original cost was $513,000 with no salvage value and a 6-year estimated useful life. Income before depreciation expense was $568,000 in 2025 and $831,000 in 2026. Sunny's tax rate is 20%. (a) Prepare the journal entry to record depreciation in 2026. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry) Account Titles and Explanation Debit Credit

Name: Dengar Sunny Corp. changed from the straight-line method to the double
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Description: Dengar Sunny Corp. changed from the straight-line method to the double-declining-balance method in 2026 on all its equipment. There wasno change in the salvage values or useful lives. The equipment was purchased in 2025, and the original cost was $51

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 66P: At the end of 2020, Magenta Manufacturing Company discovered that construction cost had been...

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At the end of 2020, Magenta Manufacturing Company discovered that construction cost had been capitalized as a cost of the factory building in 2015 when it should have been treated as a cost of production equipment installation costs. As a result of the misclassification, the depreciation through 2018 was understated by 110,000, and depreciation for 2019 was understated by 90,000. What would be the consequences of correcting for the misclassification of the property cost? a. The taxpayer uses the FIFO inventory method, and 25% of goods produced during the period were included in the ending inventory. b. The taxpayer uses the LIFO inventory method, and no new LIFO layer was added during 2019.
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