Company's net incomes for the past three years are presented below (ignore taxes):

2022 2021 2020

$480,000 $450,000 $360,000

During the 2022 year-end audit, the following items come to your attention:

1. company bought equipment on January 1, 2019 for $500,000 with a $50,000 estimated salvage value and a five-year life. The company debited an expense account and credited cash on the purchase date for the entire cost of the asset. (Straight-line method)

2. During 2022, the company changed from the FIFO method to the LIFO method of accounting for inventory. The following computations present cost of goods sold using both methods.

2022 2021 2020

FIFO 36,000 36,000 36,000

LIFO 46,080 57,600 72,000

The net income for 2022 was computed using the LIFO method.

3. company, in reviewing its provision for uncollectible during 2022, has determined that 1% is the appropriate amount of bad debt expense to be charged to operations. The company had used 1/2 of 1% as its rate in 2020 and 2021 when the expense had been $18,000 and $12,000, respectively. The company recorded bad debt expense under the new rate for 2022. The company would have recorded $6,000 less of bad debt expense on December 31, 2022 under the old rate.

Instructions

Prepare in general journal form the entry necessary in 2022 for each of the above accounting changes, ignore income taxes. Assume the books have been closed for years 2020, and 2021.