Gerald Englehart Industries changed from the double-declining-balance to the str

Question

Gerald Englehart Industries changed from the double-declining-balance to the straight-line method in 2015 on all its plant assets. There was no change in the assets’ salvage values or useful lives. Plant assets, acquired on January 2, 2012, had an original cost of $2,393,600, with a $105,600 salvage value and an 8-year estimated useful life. Income before depreciation expense was $369,600 in 2014 and $300,800 in 2015.

Prepare the journal entry to record the change in depreciation method in 2015. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Depreciation Expense $XXX

Starting with income before depreciation expense, prepare the remaining portion of the income statement for 2014 and 2015.

2015 2014 income before depreciation expense depreciation expense net income

Explanation / Answer

Depreciation Expense Debit $ 153484

Accumlated Dereciation Credit $ 153484

Opening Depreciation Straight Line Closing balance Opening Depreciation as double declining method Closing balance Difference 2012 $2,393,600 $286,000 $2,107,600 $2,393,600 $299,200 $2,094,400 2013 $2,107,600 $286,000 $1,821,600 $2,094,400 $261,800 $1,832,600 2014 $1,821,600 $286,000 $1,535,600 $1,832,600 $229,075 $1,603,525 2015 $1,535,600 $286,000 $1,249,600 $1,603,525 $200,441 $1,403,084 $153,484 $1,144,000 $990,516

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