Frederick Industries changed from the double-declining balance to the straight-line method in 2010 on all its plant assets. There was no change in the asset's salvage values or useful lives. Plant assets, acquired on January 2, 2007 had an original cost of $2,400,000, with a $100,000 salvage value and an 8-year estimated useful life. Income before depreciation expense was $370,000 in 2009 and $300,000 in 2010.
(a) Record the journal entry o record the change in depreciation method in 2010.
Depreciation Expense $
Accumulated Depreciation-Plant Assets $
(b) Starting with income before depreciation expense, prepare the remaining portion of the income statement for 2009 and 2010.
Income before depreciation expense 2010$ 2009$
Depreciation expense 2010$ 2009$
Net income 2010$ 2009$© BrainMass Inc. brainmass.com October 2, 2020, 1:50 am ad1c9bdddf
Annual depreciation from 2007 to 2009=(2,400,000-100,000)/8=287,500
Book value on 1/1/2010=2,400,000-287,500*3=1,537,500
Depreciation rate in ...