Gota Ltd, a small company following ASPE is adjusting and correcting their books at the end of 2020. In reviewing its re
Posted: Wed May 04, 2022 7:30 am
Gota Ltd, a small company following ASPE is adjusting and
correcting their books at the end of 2020.
In reviewing its records, it compiles the following
information.
In 2020, Gota changed the depreciation method on its office
equipment from double.
Declining balance to straight line because of a change in the
pattern of benefits received.
The equipment had an original cost of $160 000 when purchased on
January 1,2018.
At that time, it was estimated that the office equipment had an
eight-year useful life and no residual value.
Depreciation expense recorded prior to 2020 under the
double declining balance method was $70 000.
Gota has already recorded 2020 depreciation expense of $22500
using the double declining balance method.
Prepare necessary journal entries at December 31,2020 to record
the above corrections and changes as appropriate. The books are
still open for 2020. Ignore tax effect.
correcting their books at the end of 2020.
In reviewing its records, it compiles the following
information.
In 2020, Gota changed the depreciation method on its office
equipment from double.
Declining balance to straight line because of a change in the
pattern of benefits received.
The equipment had an original cost of $160 000 when purchased on
January 1,2018.
At that time, it was estimated that the office equipment had an
eight-year useful life and no residual value.
Depreciation expense recorded prior to 2020 under the
double declining balance method was $70 000.
Gota has already recorded 2020 depreciation expense of $22500
using the double declining balance method.
Prepare necessary journal entries at December 31,2020 to record
the above corrections and changes as appropriate. The books are
still open for 2020. Ignore tax effect.