2. (Change in Estimate & Error Correction) Ivan Company is in the process of preparing its financial statements for 2023. Assume that no entries for depreciation have been recorded in 2023. The following information related to depreciation of fixed assets is provided to you. 1. Ivan purchased equipment on January 2, 2020 for $85,000. At that time, the equipment had an estimated useful life of 10 years with a $5,000 residual value. The equipment is depreciated on a straight line basis. On January 2, 2023 as a result of additional information, the company determined that the equipment has a remaining useful life of 4 years with a $3,000 residual value. 2. During 2023, Ivan changed from the double declining balance method for its building to the straight line method. The bulding originally cost $300,000. It had a useful life of 10 years and a residual value of $30,000. The following computations present depreciation on both bases for 2021 and 2022. 2022 2021 Straight line $27,000 $27,000 Declining Balance 48,000 60,000 3. Ivan purchased a machine on July 1, 2021 at a cost of $120,000. The machine has a residual value of $16,000 and a useful life of 8 years. Ivan's bookkeeper recorded straight line depreciation in 2021 and 2022 but failed to consider the residual value. Required: a) Prepare the journal entries to record depreciation expense for 2023 and correct any errors made to date related to the information provided. b) Show comparative net come for 2022 and 2023. Income before depreciation expense was $300,000 in 2023, and was $310,000 in 2022. (ignore taxes!)