For tax purpose, the company changes (1) depreciation method for building ($100,000,000) from double-declining to straight, and (2) salvage value from $25,000,000 to $868,800. Tax rate is 20% for all years. Balances in the deferred tax asset and deferred tax liability accounts at January 1, 2021, were $3,500,000, and $270,000 (1,350,000*20%). Espenses include $1,625,061 for life insurance on key executives.

What is the journal entry for the above transaction? (year end adjusting entry)

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January 5th Traded in all of used computer equipment with a fair value of $13,200,000., and received in exchange new computer equipment (useful life: 10 years, salvage value: 1,947,040) with a fair value of $8,000,000 plus cash of $500,000. Double-declining method will be used. The trade is for non-commercial subtance. January 5th Traded in all of used computer equipment with a fair value of $13,200,000., and received in exchange new computer equipment (useful life: 10 years, salvage value: 1,947,040) with a fair value of $8,000,000 plus cash of $500,000. Double-declining method will be used. The trade is for non-commercial subtance.

Answer rating: 100% (QA)

Answer Heres the journal entry for the yearend adjusting entry to reflect the change in depreciation method and salvage value for the building as well ... View the full answer