E22-9 (Error and Change in Estimate-Depreciation) Joy Cunningham Co. purchased a machine on January 1, 2005 for $550,000. At that time it was estimated that the machine would have a 10 year life and no salvage value. On December 31, 2008, the firm’s accountant found that the entry for depreciation expense had been omitted in 2006. In addition, management has informed the accountant that the company plans to switch to straight-line depreciation, starting with the year 2008. At present the company uses the sum of the year’s digits method for depreciating equipment.
Instructions
Prepare the general journal entries that should be made at December, 31 2008 to record these events. (Ignore the effects)
Click here for the solution: Joy Cunningham Co. purchased a machine on January 1, 2005 for $550,000
