Question: Mann Corporation decided at the beginning of 2011 to change
Mann Corporation decided at the beginning of 2011 to change from the capital cost allowance (CCA) method of depreciating its capital assets (a declining-balance method that is a non-GAAP method because CCA does not remove the asset's carrying amount on disposition) to straight-line depreciation because the straight-line method will result in more relevant financial information and is a GAAP compliant method. The company will continue to use the capital cost allowance method for tax purposes. For years prior to 2011, total depreciation expense under the two methods is as follows: capital cost allowance, $117,000; and straight-line, $76,000. The tax rate is 30%. Mann follows accounting standards for private enterprises (ASPE). Prepare Mann’s 2011 journal entry to record the accounting change.
Answer to relevant QuestionsIndicate the effect—Understated (U), Overstated (O), or No Effect (NE)—that each of the following errors has on 2011 net income and 2012 net income: In 2012, Dody Corporation discovered that equipment purchased on January 1, 2010, for $75,000 was expensed in error at that time. The equipment should have been depreciated over five years, with no residual value. The tax ...Ever since the unethical actions of some employees of Enron Corp. first came to light, ethics in accounting has been in the news with increasing frequency. The unethical actions of the employees essentially involved their ...On January 1, 2007, Zui Corporation purchased a building and equipment that had the following useful lives, residual values, and costs: Building: 40-year estimated useful life, $50,000 residual value, $1,200,000 ...Kitchener Corporation has followed IFRS and used the accrual basis of accounting for several years. A review of the records, however, indicates that some expenses and revenues have been handled on a cash basis because of ...
Post your question