The fact that generally accepted accounting principles allow companles flexibility in choosing between certain allocation methods can make it dlfficult for a financial analyst to compare perlodic performance from firm to firm. Suppose you were a financial analyst trying to compare the performance of two companles. Company A uses the double-decliningbalance depreclation method. Company B uses the straight-Iine method. You have the following information taken from the 12/31/2021 year-end financlal statements for Company B: You also determine that all of the assets constituting the plant and equipment of Company B were acquired at the same time, and that all of the $200,000 represents depreclable assets. Also, all of the depreclable assets have the same useful life and residual values are zero. Required: 1. In order to compare performance with Company A, estimate what B's depreclation expense would have been for 2021 if the doubledeclining-balance depreclation method had been used by Company B since acquisition of the depreclable assets. 2 If Company B decided to switch depreclation methods in 2021 from the straight line to the double-declining-balance method, prepare the 2021 joumal entry to record depreclation for the year, assuming no journal entry for depreciation In 2021 has yet been recorded. In order to compare performance with Company Ar estimate what B's depreciation expense would have been for 2021 if the double-declining-balance depreciation method had been used by Company B since acquisition of the depreciable assets. If Company B decided to switch depreciation methods in 2021 from the straight line to the double-declining-balance method, prepare the 2021 joumal entry to record depreciation for the year, assuming no joumal entry for depreciation in 2021 has yet been recorded. (If no entry is required for a transaction/event, select "No joumal entry required" in the first account field.) Journal entry worksheet Note: Enter debits before cred ts. The fact that generally accepted accounting principles allow companles flexibility in choosing between certain allocation methods can make it dlfficult for a financial analyst to compare perlodic performance from firm to firm. Suppose you were a financial analyst trying to compare the performance of two companles. Company A uses the double-decliningbalance depreclation method. Company B uses the straight-Iine method. You have the following information taken from the 12/31/2021 year-end financlal statements for Company B: You also determine that all of the assets constituting the plant and equipment of Company B were acquired at the same time, and that all of the $200,000 represents depreclable assets. Also, all of the depreclable assets have the same useful life and residual values are zero. Required: 1. In order to compare performance with Company A, estimate what B's depreclation expense would have been for 2021 if the doubledeclining-balance depreclation method had been used by Company B since acquisition of the depreclable assets. 2 If Company B decided to switch depreclation methods in 2021 from the straight line to the double-declining-balance method, prepare the 2021 joumal entry to record depreclation for the year, assuming no journal entry for depreciation In 2021 has yet been recorded. In order to compare performance with Company Ar estimate what B's depreciation expense would have been for 2021 if the double-declining-balance depreciation method had been used by Company B since acquisition of the depreciable assets. If Company B decided to switch depreciation methods in 2021 from the straight line to the double-declining-balance method, prepare the 2021 joumal entry to record depreciation for the year, assuming no joumal entry for depreciation in 2021 has yet been recorded. (If no entry is required for a transaction/event, select "No joumal entry required" in the first account field.) Journal entry worksheet Note: Enter debits before cred ts
