Tarkington Co. purchased a machine on January 1, 2009, for $440,000. At that time it was estimated
Question:
Tarkington Co. purchased a machine on January 1, 2009, for $440,000. At that time it was estimated that the machine would have a 10-year life and no salvage value. On December 31, 2012, the firm’s accountant found that the entry for depreciation expense had been omitted in 2010. In addition, management has informed the accountant that the company plans to switch to straight-line depreciation, starting with the year 2012. At present, the company uses the sum-of- the-years’- digits method for depreciating equipment.
Instructions
Prepare the general journal entries that should be made at December 31, 2012, to record these events (Ignore tax effects.)
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