Brief Exercise 20-4 Change in depreciation methods [LO20-3] Irwin, Inc., constru

Question

Brief Exercise 20-4 Change in depreciation methods [LO20-3] Irwin, Inc., constructed a machine at a total cost of $57 million. Construction was completed at the end of 2012 and the machine was placed in service at the beginning of 2013. 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 $2 million. At the beginning of 2016, Irwin decided to change to the straight-line method. Ignoring income taxes, prepare the journal entry relating to the machine for 2016. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)

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working Cost of Asset 57 Less: Accumulated Depreciation till date 27 (10+9+8) - 3 Years Sum of Year Digit method Remaining Cost 30 Less: Residual Value 2 Remaining Depreciable Value 28 Remaining Life 10-3 7 Year Annual Depreciation-Straight Line 28/7 4 Account Debit Credit Depreciation 4 Accumulated Depreciation 4

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