Barton Inc. changed the method of calculating depreciation on its equipment from straightline to doubledeclining balance during
Question:
Barton Inc. changed the method of calculating depreciation on its equipment from straightline to doubledeclining balance during 2020. The cumulative effect of the change is an additional expense of $46,000 related to prior years. The tax benefit is $13,000. Record the entry on December 31, 2020.
Step by Step Answer:
2020 Dec 31 Retained Earnings 3...View the full answer
Fundamental Accounting Principles Volume II
ISBN: 9781260305838
16th Canadian edition
Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann
Related Video
In accounting terms, depreciation is defined as the reduction of the recorded cost of a fixed asset in a systematic manner until the value of the asset becomes zero or negligible. An example of fixed assets are buildings, furniture, office equipment, machinery, etc. The land is the only exception that cannot be depreciated as the value of land appreciates with time. Depreciation allows a portion of the cost of a fixed asset to be the revenue generated by the fixed asset. This is mandatory under the matching principle as revenues are recorded with their associated expenses in the accounting period when the asset is in use. This helps in getting a complete picture of the revenue
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