Oriole Company changed depreciation methods in 2025 from double-declining-balance to straight-line. Depreciation prior to 2025 under double-declining-balance was $95,700, whereas straight-line depreciation prior to 2025 would have been $45,500. Oriole's depreciable assets (equipment) had a cost of $235,500 with a $36,900 salvage value, and an 7-year remaining useful life at the beginning of 2025. Prepare the 2025 journal entry, if any, related to Oriole's depreciable assets. (Credit account titles are automatically indented when the 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.)
Oriole Company changed depreciation methods in 2025 from double-declining-balance to straight-line. Depreciation prior to 2025 under double-declining-balance was $95,700, whereas straight-line depreciation prior to 2025 would have been $45,500. Oriole's depreciable assets (equipment) had a cost of $235,500 with a $36,900 salvage value, and an 7-year remaining useful life at the beginning of 2025. Prepare the 2025 journal entry, if any, related to Oriole's depreciable assets. (Credit account titles are automatically indented when the 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.)
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:Oriole Company changed depreciation methods in 2025 from double-declining-balance to straight-line. Depreciation prior to 2025
under double-declining-balance was $95,700, whereas straight-line depreciation prior to 2025 would have been $45,500. Oriole's
depreciable assets (equipment) had a cost of $235,500 with a $36,900 salvage value, and an 7-year remaining useful life at the
beginning of 2025.
Prepare the 2025 journal entry, if any, related to Oriole's depreciable assets. (Credit account titles are automatically indented when the
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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