Alteran Corporation purchased office equipment for $2.0 million in 2015. The equ

Question

Alteran Corporation purchased office equipment for $2.0 million in 2015. The equipment is being depreciated over a 5-year life using the sum-of-the-years'-digits method. The residual value is expected to be $800,000. At the beginning of 2018, Alteran decided to change to the straight-line depreciation method for this equipment.

Required:
Prepare the journal entry to record depreciation for 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)

Explanation / Answer

Sum of years' digits = 5*(5+1)/2 = 15 Accumulated depreciation till 2017 = (2000000-800000)/15*12= $960000 Book value at the beginning of 2017 = 2000000-960000= $1040000 Journal entry: Depreciation expense 120000 =(1040000-800000)/2       Accumulated depreciation 120000

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.