On December 30, 2017, Rival Industries acquired its office building at a cost of $12,300,000. It has been depreciated on a straight-line basis assuming a useful life of 40 years and no residual value. Early in 2021, the estimate of useful life was revised to 28 years in total with no change in residual value.
At the beginning of 2017, the Hoffman Group purchased office equipment at a cost of $396,000. Its useful life was estimated to be 10 years with no residual value. The equipment has been depreciated by the straight-line method.
On January 1, 2021, the company changed to the double-declining-balance method.At the beginning of 2021, Jantzen Specialties, which uses the straight-line method, changed to the double-declining-balance method for newly acquired vehicles. The change decreased current year net income by $605,000.
1. Prepare any journal entry necessary as a direct result of the change as well as any adjusting entry for 2021 related to the situation described. (Ignore income tax effects.)
A. Record the entry necessary as a direct result of the change in situation a.
B. Record the adjusting entry for situation a.
c.Record the entry necessary as a direct result of the change in situation b.
D.Record the adjusting entry for situation b.
e. Record the entry necessary as a direct result of the change in situation c.
A.
Date | Particulars | LF No. | Debit | Credit |
Dec-18 | Depreciation Expense A/C Dr | 307,500.00 | ||
To Accumulated Depreciation A/c | 307,500.00 | |||
Dec-19 | Depreciation Expense A/C Dr | 307,500.00 | ||
To Accumulated Depreciation A/c | 307,500.00 | |||
Dec-20 | Depreciation Expense A/C Dr | 307,500.00 | ||
To Accumulated Depreciation A/c | 307,500.00 | |||
Dec-21 | Depreciation Expense A/C Dr | 834,642.86 | ||
To Accumulated Depreciation A/c | 834,642.86 |
Depreciation for 40 Years till 2020 | |||
Depreciation | Book Value | Life In Years | |
2017 | 12,300,000.00 | 40 | |
2018 | 307,500.00 | 11,992,500.00 | |
2019 | 307,500.00 | 11,685,000.00 | |
2020 | 307,500.00 | 11,377,500.00 | |
922,500.00 | |||
Depreciation for 28 Years till 2021 | |||
Depreciation | Book Value | Life In Years | |
2017 | 12,300,000.00 | 28 | |
2018 | 439,285.71 | 11,860,714.29 | |
2019 | 439,285.71 | 11,421,428.57 | |
2020 | 439,285.71 | 10,982,142.86 | |
2021 | 439,285.71 | 10,542,857.14 | |
1,757,142.86 | |||
Dec-21 Depreciation Adj | |||
834,642.86 |
B.
Date | Particulars | LF No. | Debit | Credit |
Dec-17 | Depreciation Expense A/C Dr | 39,600.00 | ||
To Accumulated Depreciation A/c | 39,600.00 | |||
Dec-18 | Depreciation Expense A/C Dr | 39,600.00 | ||
To Accumulated Depreciation A/c | 39,600.00 | |||
Dec-19 | Depreciation Expense A/C Dr | 39,600.00 | ||
To Accumulated Depreciation A/c | 39,600.00 | |||
Dec-20 | Depreciation Expense A/C Dr | 39,600.00 | ||
To Accumulated Depreciation A/c | 39,600.00 | |||
Dec-21 | Depreciation Expense A/C Dr | 47,520.00 | ||
To Accumulated Depreciation A/c | 47,520.00 |
Depreciation | Book Value | Life In Years | Percentage | |
2017 | 39,600.00 | 396,000.00 | 10 | 0.1 |
2018 | 39,600.00 | 356,400.00 | 10 | 0.1 |
2019 | 39,600.00 | 316,800.00 | 10 | 0.1 |
2020 | 39,600.00 | 277,200.00 | 10 | 0.1 |
2021 | 47,520.00 | 237,600.00 | 10 | 0.2 |
C
Dec-21 | Depreciation Expense A/C Dr | 605,000.00 | ||
To Accumulated Depreciation A/c | 605,000.00 |
On December 30, 2017, Rival Industries acquired its office building at a cost of $12,300,000. It...
Described below are three independent and unrelated situations involving accounting changes. Each change occurs during 2021 before any adjusting entries or closing entries are prepared. On December 30, 2017, Rival Industries acquired its office building at a cost of $12,300,000. It has been depreciated on a straight-line basis assuming a useful life of 40 years and no residual value. Early in 2021, the estimate of useful life was revised to 28 years in total with no change in residual value....
Described below are three independent and unrelated situations involving accounting changes. Each change occurs during 2021 before any adjusting entries or closing entries are prepared. On December 30, 2017, Rival Industries acquired its office building at a cost of $10,000,000. It has been depreciated on a straight-line basis assuming a useful life of 40 years and no residual value. Early in 2021, the estimate of useful life was revised to 28 years in total with no change in residual value....
Described below are three independent and unrelated situations involving accounting changes. Each change occurs during 2021 before any adjusting entries or closing entries are prepared. On December 30, 2017, Rival Industries acquired its office building at a cost of $10,200,000. It has been depreciated on a straight-line basis assuming a useful life of 40 years and no residual value. Early in 2021, the estimate of useful life was revised to 28 years in total with no change in residual value....
2nd Journal entry: Record the adjusting entry for situation a. 3rd Journal entry: Record the entry necessary as a direct result of the change in situation b. 4th Journal entry: Record the adjusting entry for situation b. 5th Journal entry: Record the entry necessary as a direct result of the change in situation c. Described below are three independent and unrelated situations involving accounting changes. Each change occurs during 2021 before any adjusting entries or closing entries are prepared. a....
Described below are three independent and unrelated situations involving accounting changes. Each change occurs during 2021 before any adjusting entries or closing entries are prepared. a. On December 30, 2017, Rival Industries acquired its office building at a cost of $10,500,000. It has been depreciated on a straight-line basis assuming a useful life of 40 years and no residual value. Early in 2021, the estimate of useful life was revised to 28 years in total with no change in residual...
Described below are three independent and unrelated situations involving accounting changes. Each change occurs during 2021 before any adjusting entries or closing entries are prepared. a. On December 30, 2017, Rival Industries acquired its office building at a cost of $9,600,000. It has been depreciated on a straight- line basis assuming a useful life of 40 years and no residual value. Early in 2021, the estimate of useful life was revised to 28 years in total with no change in...
Described below are three independent and unrelated situations involving accounting changes. Each change occurs during 2018 before any adjusting entries or closing entries are prepared. a. On December 30, 2014, Rival Industries acquired its office building at a cost of $11,700,000. It has been depreciated on a straight- line basis assuming a useful life of 40 years and no residual value. Early in 2018, the estimate of useful life was revised to 28 years in total with no change in...
Described below are three independent and unrelated situations involving accounting changes. Each change occurs during 2021 before any adjusting entries or closing entries are prepared. a. On December 30, 2017, Rival Industries acquired its office building at a cost of $10,000,000. It has been depreciated on a straight- line basis assuming a useful life of 40 years and no residual value. Early in 2021, the estimate of useful life was revised to 28 years in total with no change in...
Problem 11-10 Accounting changes; three accounting situations [LO11-2, 11-5, 11-6] Described below are three independent and unrelated situations involving accounting changes. Each change occurs during 2018 before any adjusting entries or closing entries are prepared. a. On December 30, 2014, Rival Industries acquired its office building at a cost of $11,700,000. It has been depreciated on a straight- line basis assuming a useful life of 40 years and no residual value. Early in 2018, the estimate of useful life was...
Check my work Described below are three independent and unrelated situations involving accounting changes. Each change occurs during 2018 before any adjusting entries or closing entries are prepared. a. On December 30, 2014, Rival Industries acquired its office building at a cost of $11,500,000. It has been depreciated on a straight-line basis assuming a useful life of 40 years and no residual value. Early in 2018, the estimate of useful life was revised to 28 years in total with no...