Weaver Textiles Inc

question 71

Essay

Weaver Textiles Inc. has used the straight-line method to depreciate its equipment since it started business in 2005. At the beginning of 2009, the company decided to change to the double-declining-balance (DDB). method. Depreciation as reported and as it would have been reported if the company had always used DDB is listed below:
Required:
What journal entry, if any, should Weaver make to record the effect of the accounting change (ignore income taxes)? Explain.
$\begin{array}{rrr}\text { Year }& \text { Straight-Line } & \text { DDB } \\2005 & \$ 22,000 & \$ 45,000 \\2006 & 25,000 & 40,000 \\2007 & 28,000 & 38,000 \\2008 & 28,000 & 32,000\end{array}$

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Definitions:

Standard Deviation

A measure that quantifies the amount of variation or dispersion of a set of data values from the mean.

Standard Normal Random Variable

A special case of the normal distribution with a mean of zero and a standard deviation of one.

Probability

The measure of the likelihood that an event will occur, expressed as a number between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.

z

A standard score representing the number of standard deviations an observation or datum is above or below the mean of what is being observed or measured.