Required compute depreciation for 2013 and 2014 aacsb

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Required: Compute depreciation for 2013 and 2014. AACSB: Analytic AICPA FN: Measurement Blooms: Apply Difficulty: 3 Hard Learning Objective: 11-05 Explain the appropriate accounting treatment required when a change is made in the service life or residual value of property; plant; and equipment and intangible assets. Spiceland - Chapter 11 #120 Topic: Explain the appropriate accounting treatment required when a change is made in the service life or residual value of PP & E and intangible assets
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121. Eckland Manufacturing Co. purchased equipment on January 1, 2011, at a cost of $90,000. Straight-line depreciation for 2011 and 2012 was based on an estimated eight-year life and $2,000 estimated residual value. In 2013, Eckland revised its estimate and now believes the equipment will have a total service life of only six years, while the residual value remains the same. Required: Compute depreciation for 2013 and 2014. AACSB: Analytic AICPA FN: Measurement Blooms: Apply Difficulty: 3 Hard Learning Objective: 11-05 Explain the appropriate accounting treatment required when a change is made in the service life or residual value of property; plant; and equipment and intangible assets. Spiceland - Chapter 11 #121 Topic: Explain the appropriate accounting treatment required when a change is made in the service life or residual value of PP & E and intangible assets
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122. Weaver Textiles Inc. has used the straight-line method to depreciate its equipment since it started business in 2009. At the beginning of 2013, the company decided to change to the double-declining-balance (DDB) method. Depreciation as reported and as it would have been reported if the company had always used DDB is listed below: Required: What journal entry, if any, should Weaver make to record the effect of the accounting change (ignore income taxes)? Explain. The change in depreciation method is treated prospectively, just like a change in accounting estimate. Thus, no entry is required to record the effect of the change and depreciation for 2013 and remaining years of the assets' lives would be determined by applying the DDB method to the remaining depreciable basis of the assets. AACSB: Analytic AICPA BB: Critical Thinking Blooms: Analyze Difficulty: 2 Medium Learning Objective: 11-06 Explain the appropriate accounting treatment required when a change in depreciation; amortization; or depletion method is made. Spiceland - Chapter 11 #122 Topic: Explain the appropriate accounting treatment required when a change in depreciation, amortization, or depletion method is made
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123. Gonzaga Company has used the double-declining-balance method for depreciation since it started business in 2009. At the beginning of 2013, the company decided to change to the straight-line method. Depreciation as reported and what it would have been reported if the company had always used straight-line is listed below: Required: What journal entry, if any, should Gonzaga make to record the effect of the accounting change (ignore income taxes)? Explain.
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