Question

I need help with the 2016 depreciation expense. To get the Net income of 2016

Sunland Company is in the process of preparing its financial statements for 2017. Assume that no entries for depreciation have been recorded in 2017 The following information related to depreciation of fixed assets is provided to you. 1. Sunland purchased equipment on January 2, 2014, for $89,100. At that time, the equipment had an estimated useful life of 10 years with a $5,100 salvage value. The equipment is depreciated on a straight-line basis. On January 2, 2017, as a result of additional information, the company determined that the equipment has a remaining useful life of 4 years with a $2,800 salvage value 2. During 2017, Sunland changed from the double-declining-balance method for its building to the straight-line method. The building originally cost $310,000. It had a useful life of 10 years and a salvage value of $31,000. The following computations present depreciation on both bases for 2015 and 2016. 2016 2015 Straight-line Declining-balance $27,900 $27,900 49,600 52,000 3. Sunland purchased a machine on July 1, 2015, at a cost of $120,000. The machine has a salvage value of $20,000 and a useful life of 8 years Sunland's bookkeeper recorded straight-line depreciation in 2015 and 2016 but failed to consider the salvage value. Your answer is correct. Prepare the journal entries to record depreciation expense for 2017 and correct any errors made to date related to the information provided. (Ignore taxes.) (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.) No. Account Titles and Explanation Debit Credit 1. TDepreciation Expens umulated 2. TDepreciation Expens umulated 3. TDepreciation Expens umulated 527 092 Buildi 092 1250 Machi To record current year depreciation.) Machi 250 umulated 75 tained Earnin 75 To correct prior year d Your answer is partially correct. Try again. Show comparative net income for 2016 and 2017. Income before depreciation expense was $310,000 in 2017, and was $320,000 in 2016. (Ignore SUNLAND COMPANY Income Statements For the Years 2017 and 2016 2017 2016 Income before depreciation expense 331000o 2000 870 73000 25190 Net income 247000

Answer 1

	Sunland Company
	Comparative Income Statement
	For the Years 2017 and 2016
		2017	2016
	Income before depreciation expense	$ 3,10,000	$ 3,20,000
Less:	Depreciation expense	$      48,700	$      70,500
	Net Income	$ 2,61,300	$ 2,49,500
	Computation of Depreciation expense:
		2017	2016
	Equipment	$      15,275	$        8,400	[($89100 - $5100) / 10]
	Buildings	$      20,925	$      49,600
	Machinery	$      12,500	$      12,500
		$      48,700	$      70,500