The Canliss Milling Company purchased machinery on January 2, 2019, for $860,000. A five-year life was...

The Canliss Milling Company purchased machinery on January 2, 2019, for $860,000. A five-year life was estimated and no residual value was anticipated. Canliss decided to use the straight-line depreciation method and recorded $172,000 in depreciation in 2019 and 2020. Early in 2021, the company changed its depreciation method to the sum-of-the-years’-digits (SYD) method.

Required:
2. Prepare any 2021 journal entry related to the change. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

journal entry

Record the adjusting entry for depreciation in 2021.

Solutions

Expert Solution

Date	Acounts Titles and Explanation	Debit	Credit
2021	Depreciation expense	$258,000
	Accumulated depreciation - Machine		$258,000
	(To record Depreciation expense in 2021)
Remaining life = (5 (Useful life) - 2 ) years = 3 Years Change in Depreciation method from straight-line depreciation to sum of year digits sum of year digits = 3 + 2 + 1 = 6 Depreciation in 2021 = (Cost (-) Accumulated Depreciation) x Remaining life / Sum of Digits = ($860,000 (-) $172,000 (-) $172,000 ) x3 / 6 = $516,000 x 3/6 = $258,000

ekkarill92 answered 1 year ago

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