Bellico Company, which has a calendar fiscal year, purchased its only depreciable plant asset on January 1, 2017, which has the following characteristics:
Original cost $10,000Estimated residual value 1,000Estimated useful life three yearsDepreciation method sum-of-years'-digits
In 2018, Bellico increased the estimated residual value to $2,000 and increased the total estimated useful life to five years for financial accounting purposes. Additional information:

Required:
1 Provide the 2018 entry(ies) for depreciation and the ending 2018 accumulated depreciation balance.
2. Provide the comparative 2017 and 2018 income statements, including disclosures related to the accounting change.

Transcribed Image Text:

2017 2018 $ 40,000 25,000 Revenue. Expenses other than depreciation and tax. Extraordinary loss before tax. Tax rate. Common shares outstanding entire year $ 50,000 30,000 5,000 30% 30% 100,000 100,000