On January 1, Year 1, the Dole Company purchased an asset that cost $154,000. The asset had an expected useful life of seven years and no estimated residual value. The company initially decided to use sum-of-the-years'-digits (SYD) depreciation for both financial accounting and income tax purposes. Depreciation expense for the straight-line method and the sum-of-the-years'-digits method is as follows: Year Straight-line over 7 Years SYD over 7 Years Difference 1 $22,000 $38,500 $16,500 2 22,000 33,000 11,000 3 22,000 27,500 5,500 4 22,000 22,000 0 5 22,000 16,500 (5,500) 6 22,000 11,000 (11,000) 7 22,000 5,500 (16,500) $154,000 $154,000 $0 At the beginning of Year 4, Dole changed from the sum-of-the-years'-digits method to the straight-line method of depreciation for financial reporting purposes. The company's income tax rate is 30%. In Year 3 and Year 4, Dole had $90,000 pretax income before depreciation and income taxes. Required: a. Complete the following section of the income statement. b. Prepare the journal entries to record the depreciation expense, tax expense, and the effect of the accounting change (if any) in Year 4. Income Statement a. Complete the following section of the income statement: Income Statement Instructions Pretax income before depreciation Depreciation expense Income before income taxes $ Income tax expense Year 3 $90,000 27,500 X Year 4 $90,000 Shaded cells have feedback. 11,000 X $11,000 X 23,700 X Net income General Journal b. Prepare the journal entries to reflect the changes on January 1. General Journal Instructions $ Points: 0/8 Shaded cells have feedback. All transactions on this page must be entered (except for post ref(s)) before you will receive Check My Work feedback PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE 1 Jan. 1 Depreciation Expense 2 Accumulated Depreciation 3 Jan. 1 Tax Expense 4 Taxes Payable 5 Score: 40/ POST. REF. DEBIT CREDIT 11,000.00 11,000.0 23,700.00 23,700.0