Question

CALCULATOR PRINTER VERSION BACK NEXT Exercise 22-14 Concord Industries changed from the double-declining-balance to the straight-line method in 2018 on all its equipment. There was no change in the assets' salvage values or useful lives. Plant assets, acquired on January 2, 2015, had an original cost of $1,561,600, with a $112.000 salvage value and an 8-year estimated useful life. Income before depreciation expense was $255,200 2017 and $320,000 in 2018 Prepare the journal entry to record depreciation expense in 2018. (Credit account ttles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account bilies and enter for the amounts) Account Tities and Explanation Starting with income before depreciation expense, prepare the remaining portion of the income statement for 2017 and 2018 Income before depreciation expense Depreciation expense Netcome Policy 10 2000-2010 sohn Wiley & Sons, the All Rights Reserved. A Division of John Wiler a sona ins

Answer 1

Under Double Declining 21 22 Rate 100%*2 23 24 25 Rate 25% 26 27 28 Beginning Value (A) 1,561,600 Depreciation Expense Accumulated Depreciation (A B) (C) Book Value Year Rate 29 (В) (A C) 1,171,200 30 390,400 292,800 219,600 390,400 2015 25% 31 878.400 25% 32 2016 1,171,200 683,200 658,800 25% 33 2017 878,400 902,800 34 Under Straight Line 35 36 Cost Price of Equipment 37 1,561,600 Less Salvage Value Depreciable Value ( A) Number of Years of Life (B) Depreciation Amount (A / B) 38 -112000 39 1,449,600 40 181,200 41 42

Beginning Value (A) 1,561,600 Year Depreciation Expense Accumulated Depreciatior Book Value 43 (A -B) (B) 181,200 44 1,380,400 1,018,000 836,800 2015 181,200 45 1,380,400 181,200 46 2016 362,400 181,200 47 2017 1,018,000 543,600 48 Depreciation under Double Declining 902,800 49 Depreciation under Straight Line Excess amount of Dep. Charged 50 543,600 51 359,200 52 Account title & explanation Debit Date Credit 53 2018 Depreciation Expense - Equipment 54 181,200 Accumulated Depreciation -Equipment 181,200 55 (To record depreciation expense) 56 57 58 2018 59 2017 Income Before Depreciation expense 320,000 60 255,200 Depreciation expense 61 181,200 219,600 62 Net Income 138,800 35,600 63 64