Frederick Industries changed from the double-declining-balance to the straight-line method in 2022 on all its plant assets. There was no change in the assets’ residual values or useful lives. Plant assets acquired on January 2, 2019 had an original cost of €2,400,000, with a €100,000 residual value and an 8-year estimated useful life. Income before depreciation expense was €370,000 in 2021 and €300,000 in 2022.

Instructions

a. Prepare the journal entry or entries to reflect the change in depreciation method in 2022.

b. Starting with income before depreciation expense, prepare the remaining portion of the income statement for 2021 and 2022.