(Change in accounting policy, LO 2, 3, 6,7) On April 21, 2000 Rustico Inc. (Rustico)

purchased a new fishing trawler for $945,000. Rustico initially amortized the trawler on a straight-line basis over 20 years, assuming a residual value of $125,000. Near the end of fiscal 2007 management decided to switch to declining balance amortization using a 10% rate. Rustico’s year end is March 31.

-Required:

a. Prepare the journal entry to record the purchase of the trawler in 2000.

b. What would be the original amortization expense for the trawler in fiscal 2001, 2002, and 2003? Prepare the journal entry to record the amortization expense in each of these years.

c. What would be the amortization expense for the trawler in 2001, 2002, and 2003 after Rustico changed to the declining-balance method?

d. Suppose the trawler was sold in 2015 for $195,000. Prepare the journal entry to record the sale.