Blue Spruce Corp. changed from the straight-line method to the double-declining-balance method in 2026 on all its equipment. There was no change in the salvage values or useful lives. The equipment was purchased in 2025, and the original cost was $483,000 with no salvage value and a 6-year estimated useful life. Income before depreciation expense was $565,000 in 2025 and $617,000 in 2026. Blue Spruce's tax rate is 20%. (a) Prepare the journal entry to record depreciation in 2026. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Account Titles and Explanation Debit Credit
Blue Spruce Corp. changed from the straight-line method to the double-declining-balance method in 2026 on all its equipment. There was no change in the salvage values or useful lives. The equipment was purchased in 2025, and the original cost was $483,000 with no salvage value and a 6-year estimated useful life. Income before depreciation expense was $565,000 in 2025 and $617,000 in 2026. Blue Spruce's tax rate is 20%. (a) Prepare the journal entry to record depreciation in 2026. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Account Titles and Explanation Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:Blue Spruce Corp. changed from the straight-line method to the double-declining-balance method in 2026 on all its equipment. There
was no change in the salvage values or useful lives. The equipment was purchased in 2025, and the original cost was $483,000 with no
salvage value and a 6-year estimated useful life. Income before depreciation expense was $565,000 in 2025 and $617,000 in 2026.
Blue Spruce's tax rate is 20%.
(a)
Prepare the journal entry to record depreciation in 2026. (Credit account titles are automatically indented when amount is entered. Do
not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before
credit entry.)
Account Titles and Explanation
Debit
Credit
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