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

question 102

Essay

Pinnacle Corporation has been using the straight-line depreciation method to depreciate some office equipment that was acquired at the beginning of 2006. At the beginning of 2009, Pinnacle decided to change to the sum-of-the-years'-digits method. The equipment cost $120,000 and is expected to have no salvage value. The estimated useful life of the equipment is 5 years. The tax rate is 30%.
Required:
Prepare the journal entry, if any, to record the accounting change at the beginning of 2009.

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Definitions:

Wealthy Industrialists

Individuals who have amassed significant wealth and influence through the ownership and operation of large-scale industries, often playing key roles in economic development.

Financial Resources

Assets in the form of cash or easily convertible into cash, utilized by individuals, businesses, or governments to carry out their operations and achieve their objectives.

Free-Labor Ideology

The belief in the 19th-century United States that labor should result from free choice, not coercion, and is a path to wealth and self-respect.

Virtuous Life

Living a life characterized by moral excellence, righteousness, and ethical behavior, often associated with philosophical and religious teachings.