Teal Company changed depreciation methods in 2020 from double-declining-balance to straight-line. Depreciation prior to 2020 under double-declining-balance was $87,900, whereas straight-line depreciation prior to 2020 would have been $54,900. Teal's depreciable assets had a cost of $241,300 with a $43,800 salvage value, and an 8-year remaining useful life at the beginning of 2020. Prepare the 2020 journal entry related to Teal's depreciable assets (equipment).

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Business

Colt

3 December, 08:22

Teal Company changed depreciation methods in 2020 from double-declining-balance to straight-line. Depreciation prior to 2020 under double-declining-balance was $87,900, whereas straight-line depreciation prior to 2020 would have been $54,900. Teal's depreciable assets had a cost of $241,300 with a $43,800 salvage value, and an 8-year remaining useful life at the beginning of 2020. Prepare the 2020 journal entry related to Teal's depreciable assets (equipment).

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Olivia Goodman · Answer 1

Dr Depreciation Expense 13,700

Cr Accumulated Depreciation 13,700

Explanation:

assets. This is a change in estimate effected by a change in accounting principle.

Cost of depreciable assets $241,300

Accumulated depreciation (87,900)

Carrying value at January 1, 2020 153,400

Salvage value (43,800)

Depreciable base 109,600

Depreciation in 2014 = $109,600 : 8 = $13,700

Journal entry related to Teal's depreciable assets

Dr Depreciation Expense 13,700

Cr Accumulated Depreciation 13,700