70.2K

Verified Solution

Link Copied!

e HW 11 The fact that companies are given the Sexibility in choosing between certain alocation methods can difioult for nfinancial analyst to compare periodio performance from Srm to firm make it Suppose you were a financial analyst trying to compare the performance of two comparies Company A uses the double-declining-balance depreciation method. Company B uses the straight-ine method. You have the following infommation taken from the 12131/13 year end financial statements for Company B $10,000 Plant and equipment, at cost $200,000 Less: Aceumulated depreciation (40.000) Net $160,000 You also determine that all of the assets constibuting the plant and equipment of Company B were soquired at the same time, and that all of the $200.000 represents depreciable assets. Also, all of the depreciable assets have the same useful l ide and residual values are zero Required: (1) In order to compare performance with Company A, estimate what B's depreciation expense would have been for 2013 it the double-dedlining-balance depreoiation method hed been used by Company B since acquisition of the depreciable assets (Omit the "$" sign in your response) Year 1 (2010) Year 2 (2011) Year 3 (2012) Year 4 (2013) (2) If Company B decided to switch depreciation methods in 2013 from the straight line to the double- declining-balance method, prepare the 2013 adjusting journal entry to record depreciation for the year (Do not round intermediate calculations. Omit the "S" sign in your response.) Debit Credit Click to select) Click to select) References Learning Objective 11-02 Determine periodi sepe Worksheet using both time-based and activity-based

Answer & Explanation Solved by verified expert

See Answer