During 2019 and 2020, Faulkner Manufacturing used the sum-of-the-years'-digits (SYD) method of depreciation for its depreciable...

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During 2019 and 2020, Faulkner Manufacturing used the sum-of-the-years'-digits (SYD) method of depreciation for its depreciable assets, for both financial reporting and tax purposes. At the beginning of 2021, Faulkner decided to change to the straight-line method for both financial reporting and tax purposes. A tax rate of 25% is in effect for all years. For an asset that cost $16,000 with an estimated residual value of $1,000 and an estimated useful life of 10 years, the depreciation under different methods is as follows: Year Straight Line SYD $2,727 Difference $1,227 2019 $1,500 2020 1,500 2,455 955 $3,000 $5,182 $2,182 Required: 1. Prepare the journal entry that Faulkner will record in 2021 related to the change. 2. Suppose instead that Faulkner previously used straight-line depreciation and changed to sum-of-the-years'- digits in 2021. Prepare the journal entry that Faulkner will record in 2021 related to the change. X Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Suppose instead that Faulkner previously used straight-line depreciation and changed to sum-of-the-years'- digits in 2021. Prepare the journal entry that Faulkner will record in 2021 related to the change. (If no entry is required for a During 2019 and 2020, Faulkner Manufacturing used the sum-of-the-years'-digits (SYD) method of depreciation for its depreciable assets, for both financial reporting and tax purposes. At the beginning of 2021, Faulkner decided to change to the straight-line method for both financial reporting and tax purposes. A tax rate of 25% is in effect for all years. For an asset that cost $16,000 with an estimated residual value of $1,000 and an estimated useful life of 10 years, the depreciation under different methods is as follows: Year Straight Line SYD $2,727 Difference $1,227 2019 $1,500 2020 1,500 2,455 955 $3,000 $5,182 $2,182 Required: 1. Prepare the journal entry that Faulkner will record in 2021 related to the change. 2. Suppose instead that Faulkner previously used straight-line depreciation and changed to sum-of-the-years'- digits in 2021. Prepare the journal entry that Faulkner will record in 2021 related to the change. X Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Suppose instead that Faulkner previously used straight-line depreciation and changed to sum-of-the-years'- digits in 2021. Prepare the journal entry that Faulkner will record in 2021 related to the change. (If no entry is required for a

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ANSWER 1 Book Value on 1 Jan 2021 16000 5182 10818 Remaining useful Life 102 8 Depreciati... View the full answer