Gonzaga Company has used the double-declining-balance method for depreciation since it started business in 2012.At the beginning of 2016,the company decided to change to the straight-line method.Depreciation as reported and what it would have been reported if the company had always used straight-line is listed below:
Required:
What journal entry,if any,should Gonzaga make to record the effect of the accounting change (ignore income taxes)? Explain.
Definitions:
Quarterly Contributions
Payments or deposits made into a financial account or investment plan every three months.
Annually Compounded
An interest calculation method where interest is added to the principal balance annually, increasing the amount of subsequent interest.
Annually Compounded
Compound interest calculated and added to the principal once a year, affecting the total interest earned or paid.
Nominal Rate
The interest rate stated on a bond or loan before adjusting for inflation or other factors.
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