Question
Building: cost of $950,000; estimated useful life of 10 years with residual value of $50,000. The building has been depreciated using the straight line method
Building: cost of $950,000; estimated useful life of 10 years with residual value of $50,000. The building has been depreciated using the straight line method for the first 4 years. In 2020, the company decided to change the depreciation rate to 25% per annum with the estimated residual value of $20,000 instead, with the change in the useful life to the extension of 4 more years. 1. Prepare the journal entry to record depreciation expense for the building in 2020?
2. Using the information from previous question, In accordance with the change in value of annual depreciation, what will be the adjustment to the retained earning at the beginning of 2020
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