The Canliss Milling Company purchased machinery on January 2, 2016, for $800,000

Question

The Canliss Milling Company purchased machinery on January 2, 2016, for $800,000. A five-year life was estimated and no residual value was anticipated. Canliss decided to use the straight-line depreciation method and recorded $160,000 in depreciation in 2016 and 2017. Early in 2018, the company changed its depreciation method to the sum-of-the-years’-digits (SYD) method.

Required:
2. Prepare any 2018 journal entry related to the change. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Explanation / Answer

Book value at the beginning of 2018=800000-(160000*2)= $480000 2 Depreciation expense 240000 =480000/6*3           Accumulated depreciation 240000

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