Accounting

The fact that generally accepted accounting principles allow companies flexibility in choosing between certain allocation methods can make it difficult for a financial analyst to compare periodic performance from firm to firm. Suppose you were a financial analyst trying to compare the performance of two companies. Company A uses the double- declining-balance depreciation method. Company B uses the straight-line method. You have the following information taken from the 12/31/2021 year-end financial statements for Company B: Income Statement Depreciation expense $ 5,500 Balance Sheet Assets: Plant and equipment, at cost $ 55, 090 Less: Accumulated depreciation (22, 000) Net $ 33,000 You also determine that all of the assets constituting the plant and equipment of Company B were acquired at the same time, and that all of the $55,000 represents depreciable assets. Also, all of the depreciable assets have the same useful life 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 2021 if the double-declining-balance depreciation method had been used by Company B since acquisition of the depreciable assets. 2) If Company B decided to switch depreciation methods in 2021 from the straight line to the double-declining-balance method, prepare the 2021 journal entry to record depreciation for the year, assuming no journal entry for depreciation in 2021 has yet been recorded. Complete this question by entering your answers in the tabs below.the property, plant, and equipment section of the Jasper Company's December 31, 2020, balance sheet contained the following: Property, plant, and equipment: Land $ 116, 090 Building $ 936, 000 Less: Accumulated deprecia (180, 000) 756, 000 Equipment 163, 000 Less: Accumulated depreciation Total property, plant, and equipment The land and building were purchased at the beginning of 2016. Straight-line depreciation is used and a residual value of $36,000 for the building is anticipated. The equipment is comprised of the following three machines: Residual Life (in Machine Cost Date Acquired Value Years) 101 $ 53, 800 1/1/2018 $ 6,606 8 102 85, 000 6/30/2019 7, 600 103 24, 200 9/1/2020 2, 600 The straight-line method is used to determine depreciation on the equipment. On March 31, 2021, Machine 102 was sold for $59,000. Early in 2021, the useful life of machine 101 was revised to five years in total, and the residual value was revised to zero. Required: 1. Calculate the accumulated depreciation on the equipment at December 31, 2020. 2 Prepare the journal entry to record 2021 depreciation on machine 102 up to the date of sale. Calculate the gain or loss on the sale of machine 102. Prepare the journal entry for the sale of machine 102. Prepare the 2021 year-end journal entries to record depreciation on the building and remaining equipment. * Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Prepare the 2021 year-end journal entries to record depreciation on the building and remaining equipment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Transaction General Journal Debit Credit O Depreciation expense 56,750 Accumulated depreciation-building 36,000 Accumulated depreciation-equipment 20,750# 3 'Described below are three independent and unrelated situations involving accounting changes. Each change occurs during 2021 before any adjusting entries or closing entries are prepared. a. On December 30, 2017, Rival Industries acquired its office building at a cost of $10,300,000. It has been depreciated on a straight-line basis assuming a useful life of 40 years and no residual value. Early in 2021, the estimate of useful life was revised to 28 years in total with no change in residual value. b. At the beginning of 2017, the Hoffman Group purchased office equipment at a cost of $468,000. Its useful life was estimated to be 10 years with no residual value. The equipment has been depreciated by the straight-line method. On January 1, 2021, the company changed to the double-declining-balance method. c. At the beginning of 2021, Jantzen Specialties, which uses the straight-line method, changed to the double-declining- balance method for newly acquired vehicles. The change decreased current year net income by $475,000. Required: 1. Identify the type of change. 2. Prepare any journal entry necessary as a direct result of the change as well as any adjusting entry for 2021 related to the situation described. (Ignore income tax effects.) * Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare any journal entry necessary as a direct result of the change as well as any adjusting entry for 2021 related to the situation described. (Ignore income tax effects.) (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Date General Journal Debit Credit