shawtybrown21
shawtybrown21
25.11.2021 • 
Business

Annual depreciation expense on a building purchased a few years ago (using the straight-line method) is $5,200. The cost of the building was $104,000. The current book value of the equipment (January 1, 2021) is $88,400. At the time of purchase, the asset was estimated to have a zero salvage value. On January 1, 2021, the company decided to reduce the original useful life by 25% and to establish a salvage value of $5,200. The firm also decided double-declining-balance depreciation was more appropriate. Ignore tax effects. Required: 1. Prepare the journal entry, if any, to report the accounting change under GAAP. 2. Record the annual depreciation for 2021.

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