Question

Brief Exercise 20-4 Change in depreciation methods [LO20-3] Irwin, Inc., constructed a machine at a total...

Brief Exercise 20-4 Change in depreciation methods [LO20-3] Irwin, Inc., constructed a machine at a total cost of $57 million. Construction was completed at the end of 2012 and the machine was placed in service at the beginning of 2013. The machine was being depreciated over a 10-year life using the sum-of-the-years’-digits method. The residual value is expected to be $2 million. At the beginning of 2016, Irwin decided to change to the straight-line method. Ignoring income taxes, prepare the journal entry relating to the machine for 2016. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)

Homework Answers

Answer #1

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you.

working
Cost of Asset 57
Less: Accumulated Depreciation till date 27
(10+9+8) - 3 Years Sum of Year Digit method
Remaining Cost 30
Less: Residual Value 2
Remaining Depreciable Value 28
Remaining Life 10-3 7 Year
Annual Depreciation-Straight Line 28/7 4
Account Debit Credit
Depreciation 4
Accumulated Depreciation 4
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Irwin, Inc., constructed a machine at a total cost of $47 million. Construction was completed at...
Irwin, Inc., constructed a machine at a total cost of $47 million. Construction was completed at the end of 2014 and the machine was placed in service at the beginning of 2015. The machine was being depreciated over a 10-year life using the sum-of-the-years’-digits method. The residual value is expected to be $3 million. At the beginning of 2018, Irwin decided to change to the straight-line method. Ignoring income taxes, prepare the journal entry relating to the machine for 2018....
Irwin, Inc., constructed a machine at a total cost of $79 million. Construction was completed at...
Irwin, Inc., constructed a machine at a total cost of $79 million. Construction was completed at the end of 2014 and the machine was placed in service at the beginning of 2015. The machine was being depreciated over a 10-year life using the sum-of-the-years’-digits method. The residual value is expected to be $2 million. At the beginning of 2018, Irwin decided to change to the straight-line method. Ignoring income taxes, prepare the journal entry relating to the machine for 2018....
Irwin, Inc., constructed a machine at a total cost of $57 million. Construction was completed at...
Irwin, Inc., constructed a machine at a total cost of $57 million. Construction was completed at the end of 2014 and the machine was placed in service at the beginning of 2015. The machine was being depreciated over a 10-year life using the sum-of-the-years’-digits method. The residual value is expected to be $2 million. At the beginning of 2018, Irwin decided to change to the straight-line method. Ignoring income taxes, prepare the journal entry relating to the machine for 2018
Irwin, Inc. constructed a machine at a total cost of $56 million. Construction was completed at...
Irwin, Inc. constructed a machine at a total cost of $56 million. Construction was completed at the end of 2017 and the machine was placed in service at the beginning of 2018. The machine was being depreciated over a 10-year life using the straight-line method. The residual value is expected to be $2 million. At the beginning of 2021, Irwin decided to change to the sum-of-the-years’-digits method. Ignoring income taxes, prepare the journal entry relating to the machine for 2021.
Orange Corp. constructed a machine at a total cost of $62 million. Construction was completed at...
Orange Corp. constructed a machine at a total cost of $62 million. Construction was completed at the end of 2014 and the machine was placed in service at the beginning of 2015. The machine was being depreciated over a 7-year life using the sum-of-the-years'-digits method. The residual value is expected to be $2 million. At the beginning of 2018, Orange decided to change to the straight-line method. Ignoring income taxes, what will be Orange's depreciation expense for 2018? (Do not...
Exercise 20-11 (Algo) Change in depreciation methods [LO20-3] The Canliss Milling Company purchased machinery on January...
Exercise 20-11 (Algo) Change in depreciation methods [LO20-3] The Canliss Milling Company purchased machinery on January 2, 2019, for $830,000. A five-year life was estimated and no residual value was anticipated. Canliss decided to use the straight-line depreciation method and recorded $166,000 in depreciation in 2019 and 2020. Early in 2021, the company changed its depreciation method to the sum-of-the-years’-digits (SYD) method. Required: 2. Prepare any 2021 journal entry related to the change. (If no entry is required for a...
Required information Exercise 20-17 (Algo) Change in estimate; useful life and residual value of equipment [LO20-4]...
Required information Exercise 20-17 (Algo) Change in estimate; useful life and residual value of equipment [LO20-4] [The following information applies to the questions displayed below.] Wardell Company purchased a mini computer on January 1, 2019, at a cost of $43,400. The computer has been depreciated using the straight-line method over an estimated five-year useful life with an estimated residual value of $4,400. On January 1, 2021, the estimate of useful life was changed to a total of 10 years, and...
4. Allmond Corporation, organized on January 3, 2018, had pretax accounting income of $20 million and...
4. Allmond Corporation, organized on January 3, 2018, had pretax accounting income of $20 million and taxable income of $30 million for the year ended December 31, 2018. The 2018 tax rate is 35%. The only difference between accounting income and taxable income is estimated product warranty costs. Expected payments and scheduled tax rates (based on recent tax legislation) are as follows: 2019       $3 million             30% 2020          2 million            30% 2021          2 million            30% 2022          3 million           ...
Exercise 14-16 Error in amortization schedule [LO14-3] Wilkins Food Products, Inc., acquired a packaging machine from...
Exercise 14-16 Error in amortization schedule [LO14-3] Wilkins Food Products, Inc., acquired a packaging machine from Lawrence Specialists Corporation. Lawrence completed construction of the machine on January 1, 2014. In payment for the machine Wilkins issued a three year installment note to be paid in three equal payments at the end of each year. The payments include interest at the rate of 9%. Lawrence made a conceptual error in preparing the amortization schedule, which Wilkins failed to discover until 2016....
Whaley Distributors is a wholesale distributor of electronic components. Financial statements for the years ended December...
Whaley Distributors is a wholesale distributor of electronic components. Financial statements for the years ended December 31, 2016 and 2017, reported the following amounts and subtotals ($ in millions):             Assets              Liabilities        Shareholders Equity               Net Income     Expenses 2016    $740                  $330                     $410                                   $210                 $150            2017    $820                  $400                     $420                                   $230                 $175 In 2018, the following situations occurred or came to light: Internal auditors discovered that ending inventories reported on the financial...