Required: 1. Calculate depreciation for each year of the asset's eight-year life. 2. Are changes in depreciation methods accounted for retrospectively or prospectively?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On January 2, 2021, the Jackson Company purchased equipment to be used in its manufacturing process. The equipment has an
estimated life of eight years and an estimated residual value of $43,625. The expenditures made to acquire the asset were as follows:
Purchase price
Freight charges.
Installation charges
Jackson's policy is to use the double-declining-balance (DDB) method of depreciation in the early years of the equipment's life and
then switch to straight line halfway through the equipment's life.
Required:
1. Calculate depreciation for each year of the asset's eight-year life.
2. Are changes in depreciation methods accounted for retrospectively or prospectively?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Calculate depreciation for each year of the asset's eight-year life.
Depreciation for the Period
Year
2021
2022
2023
2024
$198,000
5,200
8,000
Beginning of
Period Book
Value
Year
Depreciation
Rate
2021
2022
2023
2024
2025
2026
2027
2028
Total
%
%
%
%
Required 2
Beginning of
Perlod Book
Value
Annual
Depreciation
Jackson's policy is to use the double-declining-balance (DDB) method of depreciation in the early years of the equipment's life and
then switch to straight line halfway through the equipment's life.
Required:
1. Calculate depreciation for each year of the asset's eight-year life.
2. Are changes in depreciation methods accounted for retrospectively or prospectively?
Complete this question by entering your answers in the tabs below.
Required 1
Calculate depreciation for each year of the asset's eight-year life.
Depreciation for the Period
Depreciation
Rate
%
%
%
%
End of Period
Accumulated
Depreciation
Annual
Depreciation
$
0
0
< Required 1
Book Value
Accumulated
Depreciation
End of Period
0
0
Book Value
0
0
Required 2 >
Transcribed Image Text:On January 2, 2021, the Jackson Company purchased equipment to be used in its manufacturing process. The equipment has an estimated life of eight years and an estimated residual value of $43,625. The expenditures made to acquire the asset were as follows: Purchase price Freight charges. Installation charges Jackson's policy is to use the double-declining-balance (DDB) method of depreciation in the early years of the equipment's life and then switch to straight line halfway through the equipment's life. Required: 1. Calculate depreciation for each year of the asset's eight-year life. 2. Are changes in depreciation methods accounted for retrospectively or prospectively? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate depreciation for each year of the asset's eight-year life. Depreciation for the Period Year 2021 2022 2023 2024 $198,000 5,200 8,000 Beginning of Period Book Value Year Depreciation Rate 2021 2022 2023 2024 2025 2026 2027 2028 Total % % % % Required 2 Beginning of Perlod Book Value Annual Depreciation Jackson's policy is to use the double-declining-balance (DDB) method of depreciation in the early years of the equipment's life and then switch to straight line halfway through the equipment's life. Required: 1. Calculate depreciation for each year of the asset's eight-year life. 2. Are changes in depreciation methods accounted for retrospectively or prospectively? Complete this question by entering your answers in the tabs below. Required 1 Calculate depreciation for each year of the asset's eight-year life. Depreciation for the Period Depreciation Rate % % % % End of Period Accumulated Depreciation Annual Depreciation $ 0 0 < Required 1 Book Value Accumulated Depreciation End of Period 0 0 Book Value 0 0 Required 2 >
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