Question - 4: [15] Bluestar Inc. acquired equipment in January 01 of 2017 at a cost of $530,000 with an estimated econom

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Question 4 15 Bluestar Inc Acquired Equipment In January 01 Of 2017 At A Cost Of 530 000 With An Estimated Econom 1 (133.68 KiB) Viewed 13 times

Question - 4: [15] Bluestar Inc. acquired equipment in January 01 of 2017 at a cost of $530,000 with an estimated economic life of 8 years and salvage value of $8,000. The equipment has been depreciated using the Sum of Years Digit method for the first 3 years for financial reporting purposes. In 2020, the company has discovered that the depreciation of 2018 has been understated by $2,000 and 2019 has been overstated by $3,000 respectively. Moreover, the company decided to change the method of computing depreciation to the double declining balance method from 2020 for the equipment, considering the salvage value of $10,000. Required: Record the relevant journal entries for the year 2020.