CALCULATOR PRINTER VERSION BACK NEXT Problem 22-2 Novak Company is in the process of preparing its financial statements for 2017. Assume that no entries for depreciation have been recorded in 2017. The following Information related to depreciation of fived assets is provided to you. 1. Novak purchased equipment on January 2, 2014, for $85,400. At that time, the equipment had an estimated useful life of 10 years with a $5,400 salvage value. The equipment is deprecated on a straight-line basis. On January 2, 2017, as a result of additional information, the company determined that the equipment has a remaining useful life of 4 years with a $3,200 salvage value. 2. During 2017, Novak changed from the double-declining-balance method for its building to the straight-line method. The building originally cost $300,000. It had a useful life of 10 years and a salvage value of $30,000. The following computations present depreciation on both bases for 2015 and 2016 tudy 2016 2015 Straight-line Declining balance $27,000 48,000 $27,000 60,000 3. Novak purchased a machine on July 1, 2015, at a cost of $110,000. The machine has a salvage value of $20,000 and a useful life of 8 year. Novak's bookkeeper recorded straight line depreciation in 2015 and 2016 but failed to consider the salvage value Your answer is partially correct. Try again Prepare the journal entries to record depreciation expense for 2017 and correct any errors made to date related to the information provided. (Ignore taxes) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required select "No Entry for the account and enter for the amounts s No. Account Tities and Explanation Depreciation Expense ment CALCULATOR PRINTER VERSION BACK Your answer is partially correct. Try again. Prepare the journal entries to record depreciation expense for 2017 and correct any errors made to date related to the information provided. (Ignore taxes.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) No. Account Titles and Explanation Debit Credit 1. Depreciation Expense 14550 Accumulated Depreciation Equipment 2. Depreciation Expense T Accumulated Depreciation Building 3. Depreciation Expense Accumulated Depreciation Machinery (To record current year depreciation) Accumulated Depreciation Machinery Retained Earnings (to correct prior your depreciation) CALCULATOR PRINTER VERSION BACK N Accumulated Depreciation Machinery Retained Earnings (To correct prior year depreciation.) Your answer is partially correct. Try again. Show comparative net income for 2016 and 2017. Income before depreciation expense was $280,000 in 2017, and was $330,000 in 2016. (Ignore taxes.) NOVAK COMPANY Comparative Income Statements For the Years 2017 and 2016 Income before depreciation expense 330000 Depreciation expense Net income Question Attempts: 2 of 4 used SAVE FOR LATER SLETT