Pinnacle Corporation Has Been Using the Straight-Line Depreciation Method to Depreciate

question 71

Short Answer

Pinnacle Corporation has been using the straight-line depreciation method to depreciate some office equipment that was acquired at the beginning of 2015. At the beginning of 2018, Pinnacle decided to change to the double-declining-balance method. The equipment cost $120,000 and is expected to have no salvage value. The estimated useful life of the equipment is five years. The tax rate is 30%.
Required:
Prepare the journal entry, if any, to record the accounting change at the beginning of 2018.

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Definitions:

Additional Accounts

Extra accounts or financial records set up for tracking specific transactions separate from the primary account.

Workers' Compensation

A form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee's right to sue their employer.

Premises Rule

A legal principle that holds property owners and occupiers liable for injuries that occur on their property, under certain conditions.

Business Trip

A journey taken for work or professional reasons, often involving travel outside the usual workplace.