P$21\mathrm{.}2($LO $1,2,3)$ Change in Estimate and Error Correction.

Moltzman Company is in the process of preparing its financial statements for $2025.$ Assume that no entries for depreciation have been recorded in $2025.$ The equipment is depreciated

on a straight$-$line basis. The following information related to depreciation of fixed assets is provided to you.

Holtzman purchased equipment on January $2,2022.$ Cost of Equipment: $$85,000.$ Estimated Useful life in Years: $10.$ Estimated Salvage Value: $$5,000.$ On January $2,2025,$ as a result of additional information, the company changed the estimate of the remaining useful life and salvage value.

New estimated remaining useful life in years: $4.$

New estimated salvage value: $ $3,000.$

$2.$ During $2025,$ Holtzman changed from the double$-$declining balance method for its building to the straight$-$line method. Original Cost of Building: $$300,000.$ Original Useful Life in Years: $10.$ Original Salvage Value: $$30,000.$

The following computations present depreciation on both bases for $2023$ and $2024,$the years for which it has been depreciation. $2024$: Straight$-$Line $$27,000,$ Declining Balance $$48,000.2023$: Straight$-$line $$27,000,$ Declining Balance $$60,000.$

Holtzman purchased a machine on July $1,2023.$ Holtzman's bookkeeper recorded straight$-$line depreciation in $2023$ and $2024$ but failed to consider the salvage.

Cost of machine: $$120,000.$ Estimated useful life in Years: $8.$ Estimated salvage value: $$16,000.$

Instructions

a$.$ Prepare the journal entries to record depreciation expense for $2025$ and correct any errors made to date related to the information provided. Use Excel's depreciation functions to calculate depreciation. $($Ignore taxes.$)$

b$.$ Show comparative net income for $2024$ and $2025.$ Income before depreciation expense follows. $($ignore taxes.$)$

Income before depreciation expense $-2025,$$$300,000$

Income before depreciation expense $-2024,$ $$310,000$

a$.1.$ What is the Depreciation through the end of $2024$ using SLN function? What is the Depreciation during $2025$ using SLN function? What is the Entry to record the depreciation expense and the Accumulated Depreciation for equipment for $2025?$

$2.$ What is the entry to record the Depreciation expense and the Accumulated Depreciation for $2025$ for Building?

$3.$ What is the entry to record the Depreciation expense and the Accumulated Depreciation for $2025$ for Machinery?

Calculation of depreciation correction using SLN: For $2023$ what was the amount of Depreciation Recorded, and the the amount of depreciation that should have been recorded? For $2024$ what was the amount of Depreciation Recorded, and the the amount of depreciation that should have been recorded? What is the correction of depreciation error entry?

b$.$ What are the amounts of Depreciation expense for $2025$ and $2024$ for Equipment, Building and Machinery. What are the amounts for the comparative income statements for $2025$ and $2024?$