George Young Industries (GYI) acquired industrial robots at the beginning of 2018 and added them to the companys assembly process. During 2021, management became aware that the $2.8 million cost of the equipment was inadvertently recorded as repair expense on GYIs books and on its income tax return. The industrial robots have 10-year useful lives and no material salvage value. This class of equipment is depreciated by the straight-line method for financial reporting purposes and for tax purposes it is considered to be MACRS 7-year property. Cost deducted over 7 years by the modified accelerated recovery system as follows:

Year	MACRS Deductions
2018	$	400,120
2019		685,720
2020		489,720
2021		349,720
2022		250,040
2023		249,760
2024		250,040
2025		124,880
Totals	$	2,800,000

The tax rate is 25% for all years involved. Required: 1. & 3. Prepare any journal entry necessary as a direct result of the error described and the adjusting entry for 2021 depreciation. 2. Will GYI account for the change (a) retrospectively or (b) prospectively?

Prepare any journal entry necessary as a direct result of the error described and the adjusting entry for 2021 depreciation. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to the nearest whole dollar.)

No	Event	General Journal	Debit	Credit
1	1	Equipmentselected answer correct	1,575,560selected answer incorrect	not attempted
		Retained earningsselected answer correct	not attempted	280,084selected answer incorrect
2	2	Depreciation expenseselected answer correct	1,575,560selected answer incorrect	not attempted
		Accumulated depreciationselected answer correct	not attempted	196,000