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Straight-L Depreciat $205,00 205,00

Straight-L Depreciat $205,00 205,00

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Rodriguez Corp. changed from the straight-line method of depreciation on its plant assets acquired in early 2018 to the double- declining-balance method in 2020 (before finalizing its 2020 financial statements) because of a change in the pattern of benefits received. The assets had an eight-year life and no expected residual value. Information related to both methods follows: Double-Declining- Balance Depreciation Straight-Line Depreciation Year Difference 2018 $410,000 $205,000 $205,000 2019 307,500 205.000 102.500 2020 230,625 205,000 25,625 Net income for 2019 was reported at $452,000; income for 2020 before depreciation and income tax is $482.000. Assume an income tax rate of 30%. The change from the straight-line method to the double-declining-balance method is considered a change in estimate. What net income is reported for 2020? Net income, 2020 What is the amount of the adjustment to opening retained earnings as at January 1, 2020? Adjustment to opening retained earnings, January 1, 2020
Transcribed Image Text:Rodriguez Corp. changed from the straight-line method of depreciation on its plant assets acquired in early 2018 to the double- declining-balance method in 2020 (before finalizing its 2020 financial statements) because of a change in the pattern of benefits received. The assets had an eight-year life and no expected residual value. Information related to both methods follows: Double-Declining- Balance Depreciation Straight-Line Depreciation Year Difference 2018 $410,000 $205,000 $205,000 2019 307,500 205.000 102.500 2020 230,625 205,000 25,625 Net income for 2019 was reported at $452,000; income for 2020 before depreciation and income tax is $482.000. Assume an income tax rate of 30%. The change from the straight-line method to the double-declining-balance method is considered a change in estimate. What net income is reported for 2020? Net income, 2020 What is the amount of the adjustment to opening retained earnings as at January 1, 2020? Adjustment to opening retained earnings, January 1, 2020
What is the amount of the adjustment to opening retained earnings as at January 1, 2019? Adjustment to opening retained earnings. January 1, 2019 What is the amount of the adjustment to opening retained earnings as at January 1, 2019? Adjustment to opening retained earnings, January 1, 2019 Prepare the journal entry, if any, to record the adjustment in the accounting records, assuming that the accounting records for 2020 are not yet closed. (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.) Account Titles and Explanation Debit Credit
Transcribed Image Text:What is the amount of the adjustment to opening retained earnings as at January 1, 2019? Adjustment to opening retained earnings. January 1, 2019 What is the amount of the adjustment to opening retained earnings as at January 1, 2019? Adjustment to opening retained earnings, January 1, 2019 Prepare the journal entry, if any, to record the adjustment in the accounting records, assuming that the accounting records for 2020 are not yet closed. (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.) Account Titles and Explanation Debit Credit
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