An Asset That Cost $49,500 Was Being Depreciated on a Sum-Of-The-Years'-Digits

question 111

Essay

An asset that cost $49,500 was being depreciated on a sum-of-the-years'-digits basis over five years with an estimated residual value of $4,500.After the end of the third year,it was decided to change to straight-line depreciation (ignore income taxes).
(a)Give any required entry as of the beginning of year 4.
(b)Give the adjusting entry to record depreciation at the end of the fourth year,taking into account the new decision.

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Definitions:

Lumber

Timber sawed or split into planks, beams, and other shapes, used for building or crafting purposes.

Demand

The desire to own anything, accompanied by the power and willingness to pay for it.

Technological Advance

Refers to improvements and innovations in technology that increase productivity and efficiency in various sectors of the economy.

Tax

A compulsory financial charge or levy imposed by a government on individuals or entities to fund public services and government activities.