On December 31, 2025, before the books were closed, the management and accountants of Tannery Inc. made the following determinations about three depreciable assets:

1. Depreciable asset X was purchased January 4, 2023. The assets original cost was $114,000, and this amount was entirely expensed in 2023. This particular asset has a 8- year useful life and no salvage value. The straight-line method was chosen for depreciation purposes.

2. Depreciable asset Y was purchased January 2, 2024. It originally cost $540,000 and, for depreciation purposes, the sum-of-the-years digit method was originally chosen. The asset was originally expected to be useful for 10 years and have a zero salvage value. In 2025, the decision was made to change the depreciation method from sum-of-the-years digits to straight-line, and the estimates relating to useful life and salvage value remained unchanged.

3. Depreciable asset Z was purchased January 3, 2021. It originally cost $160,000 and, for depreciation purposes, the straight-line method was chosen. The asset was originally expected to be useful for 8 years and have a zero salvage value. In 2025, the decision was made to extend the total life of this asset to 10 years and to estimate the salvage value at $5,000.

Additional data:

1. Income in 2025 before depreciation expense amounted to $316,000.

2. Depreciation expense on assets other than X, Y, and Z totaled $41,000 in 2025.

3. Income in 2024 was reported at $298,000.

4. Ignore all income tax effects.

5. 100,000 shares of common stock were outstanding in 2024 and 2025

Prepare all necessary entries in 2025 to record these determinations

Prepare comparative retained earnings statements for Tannery Inc. for 2024 and 2025. The company had retained earnings of $325,000 at December 31, 2023.