P$21\mathrm{.}6($LO $1,3,4)$ Accounting Change and Error Analysis.

On December $31,2025,$ before the books were closed, the management and accountants of Madrasa Inc. made the following determinations about three pieces of equipment.

$1.$ Equipment A was purchased January $2,2022.$ For depreciation purposes, the straight$-$line method was originally chosen. In $2025,$ the decision was made to change the depreciation method from straight$-$line to sum$-$of$-$years"$-$digits. The estimates relating to useful life and salvage value remained: Cost of Equipment: $$540,000.$ Original estimated useful life in Years: $10.$ Original estimated salvage value: $$0.$

$2.$ Equipment B was purchased January $3,2021.$ For depreciation purposes, the straight$-$line method was chosen. In $2025,$ the decision was made to shorten the total life of this asset and to change the salvage value: Cost of equipment: $$180,000.$ Original estimated useful life in Years: $15.$ Original estimated Salvage Value: $$0.$ New Estimated useful life in Years: $9.$ New estimated salvage value: $$3,000.$

$3.$ Equipment C was purchased January $5,2021.$ The asset's original cost was entirely expensed during $2021.$ This particular asset has a $10-$year useful life and no salvage value. The straight$-$line method was chosen for: Cost of equipment: $$160,000.$ Original estimated useful life in Years: $10.$ Original estimated salvage value: $$0.$

Additional data:

$1.$ Income in $2025$ before depreciation expense: $$400,000.2.$

$2025$ depreciation expense on assets other than A$,$ B$,$ and C : $$55,000.3.$ Income in $2024$: $$370,000.4.$Ignore all income tax effects.

$5.$ Shares of common stock outstanding in $2024$ and $2025$: $$100,000.$

Instructions

a$.$ Prepare all necessary entries in $2025$ to record these determination: What is the amount for the depreciation prior to $2025?$ What is the depreciation expense for $2025?1.$ What is the entry to record the income in $2025$ before the depreciation expense? $2.$ What is the amount for $2025$ depreciation expense on assets other than A$,$ B$,$ and C for depreciation prior to $2025$ and the $2025$ depreciation expense? What is the entry?

$3.$ What are the two entries to record the income tax expense?

b$.$ Prepare comparative retained earnings statements for Madrasa Inc. for $2025$ and $2024,$ Relevant information follows.

Retained earnings $at$ December $31,2023$: $$200,000.$

b$.$ What is the Comparative Retained Earnings Statements amounts

for the Years Ended $2025,2024.$