Question

Irwin, Inc. constructed a machine at a total cost of $45 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 sum-of-the-years’-digits method. The residual value is expected to be $1 million. At the beginning of 2021, Irwin decided to change to the straight-line method. Ignoring income taxes, prepare the journal entry relating to the machine for 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) Answer is complete but not entirely correct. No Event General Journal Debit Credit 0 4.7 Depreciation expense Accumulated depreciation x 4.70_ 4.7 4.78 x

Answer 1

Answer
Original Depreciation = (45-1)/10 = 4.4 Million per year
Accumulated depreciation (2018 to 2020) = 4.4*3 = 13.20 million
2018 Depreciation = (45-1-13.20)*7/28 = 7.70 million
Date	account and explanation	debit	credit
2021	Depreciation expense	$       7.7
	Accumulated depreciation		$   7.7
	(To record dep)

Answer 2

I am an anoymous man, but here is something that works. 

(Note this should give you an idea on how to find the awnser, and does not contain the awnser)

Sum of year is calculated by (y(y+1))/2 = sum of year, so in this case 10(10+1)/2 = 110 / 2, 55. 

Sum of year method is greater year first so 10/55 * value - residual value. 

You should do this three times for this problem, and now you are left with about 50% of the origanal depretition to straight line out over the years. 

For the problem I did, I got 

Year 1 -> 10

Year 2 -> 09

Year 3 -> 08

Year 4 to 10 -> 04 each time.