(11 points) Entity A has been using the double-declining balance depreciation method to depreciate some office equipment that was acquired at the beginning of 2014. At the beginning of 2016, Entity A decided to change to the straight-line method. The equipment cost $120,000 and is expected to have no salvage value. The estimated useful life of the equipment is five years. Ignore income taxes.

1. Prepare the appropriate journal entry to record the accounting change. If no entry is required, indicate NER and why.

2. Prepare the journal entry to record depreciation for 2016.

Part B: (9 points) Entity B's auditor discovered two errors. No errors were corrected during 2015. The errors are described as follows:

Merchandise costing $4,000 was sold to a customer for $9,000 on December 31, 2015, but it was recorded as a sale on January 2, 2016. The merchandise was properly excluded from the 2015 ending inventory. Assume the periodic inventory system is used.

A machine with a five-year life was purchased on January 1, 2015. The machine cost $20,000 and has no expected salvage value. No depreciation was taken in 2015 or 2016. Assume the straight-line method for depreciation.

Prepare appropriate journal entries (assume the 2016 books have not been closed). Ignore income taxes.