$12$

The fact that generally accepted accounting principles allow companies flexibility in choosing between certain allocation methods can make it difficult for a financial analyst to compare periodic performance from firm to firm.

$2$

points

Skipped

Suppose you were a financial analyst trying to compare the performance of two companies. Company A uses the double$-$decliningbalance depreciation method. Company B uses the straight$-$line method. You have the following information taken from the $12/31/2024.$ year$-$end financial statements for Company B:

You also deter.jmine that all of the assets constituting the plant and equipment of Company B were acquired at the same time, and that all of the $$125,000$ represents depreciable assets. Also, all of the depreciable assets have the same useful life and residual values are zero.

Required:

In order to compare performance with Company A$,$ estimate what B$\text{'}$s depreciation expense would have been for $2024$ if the double$-$declining$-$balance depreciation method had been used by Company B since acquisition of the depreciable assets.

If Company B decided to switch depreciation methods in $2024$ from the straight line to the double$-$declining$-$balance method, prepare the $2024$ journal entry to record depreciation for the year, assuming no journal entry for depreciation in $2024$ has yet been recorded.

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In order to compare performance with Company A$,$ estimate what B$\text{'}$s depreciation expense would have been for $2024$ if the double$-$declining$-$balance depreciation method had been used by Company B since acquisition of the depreciable assets.

Depreciation expense for $2024$