Recording and Determining Financial Statement Effect of Accounting Change Gear Company records $2,000 of depreciation under...
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Recording and Determining Financial Statement Effect of Accounting Change Gear Company records $2,000 of depreciation under the sum-of-years'-digits method in Year 9, the company's first year of operations In Year 10, the company decides to change to the straight-line method for accounting purposes. If the straight-line method were used in Year 9, depreciation would have been $1,500. Depreciation in Year 10 under the straight-line method is $1,800 (depreciated based on the book value on January 1 of Year 10). The tax rate is 25%. Income from continuing operations before tax and before deducting depreciation in Year 10 is $12,000. Required Provide the Year 10 entry to record this change and calculate Year 10 net income. Note: If a journal entry isn't required on any of the dates shown, select "N/A-debit" and "N/A-credit" as the account names and leave the Dr. and Cr. answers blank (zero). Date Account Dec 31, Year 10 Accumulated Depreciation Depreciation Expense To record change Year 10 Net Income: $ 0 Check x Dr. 500 0 Cr. 0x 500 x Recording and Determining Financial Statement Effect of Accounting Change Gear Company records $2,000 of depreciation under the sum-of-years'-digits method in Year 9, the company's first year of operations In Year 10, the company decides to change to the straight-line method for accounting purposes. If the straight-line method were used in Year 9, depreciation would have been $1,500. Depreciation in Year 10 under the straight-line method is $1,800 (depreciated based on the book value on January 1 of Year 10). The tax rate is 25%. Income from continuing operations before tax and before deducting depreciation in Year 10 is $12,000. Required Provide the Year 10 entry to record this change and calculate Year 10 net income. Note: If a journal entry isn't required on any of the dates shown, select "N/A-debit" and "N/A-credit" as the account names and leave the Dr. and Cr. answers blank (zero). Date Account Dec 31, Year 10 Accumulated Depreciation Depreciation Expense To record change Year 10 Net Income: $ 0 Check x Dr. 500 0 Cr. 0x 500 x
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Journal Entry for Year 10 DateAccountDrCr December 31 Year 10Accumulated Deprecia... View the full answer
Related Book For
International Financial Reporting and Analysis
ISBN: 978-1408075012
5th edition
Authors: David Alexander, Anne Britton, Ann Jorissen
Posted Date:
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