Question

Exercise 22-14 Sunland Industries changed from the double-declining-balance to the straight-line method in 2018 on all its equipment. There was no change in the assets’ salvage values or useful lives. Plant assets, acquired on January 2, 2015, had an original cost of $1,740,800, with a $99,200 salvage value and an 8-year estimated useful life. Income before depreciation expense was $275,200 in 2017 and $332,800 in 2018.   Prepare the journal entry to record depreciation expense in 2018.

Answer 1

date	General Journal	Debit	Credit
31.12.2018	Depreciation expense AC DR	205200
	To accumulated depreciation on plant AC CR		205200
	[being deprectaion has been transferred to the accumulated reserve]

A	cost of asset	1,740,800
B	salvage	99,200
	Net cost	1,641,600
	[A-B]
C	Life of asset	8
D	Depreciation[straight line]	205,200