2. Ignoring income taxes, prepare any 2018 journal entry(s) related to the change in depreciation methods.
Extracted text: Collins Corporation purchased office equipment at the beginning of 2016 and capitalized a cost of $2,116,000. This cost figure included the following expenditures: Purchase price Freight charges Installation charges Annual maintenance charge $1,930,000 38,000 28,000 120,000 Total $2,116,000 The company estimated an eight-year useful life for the equipment. No residual value is anticipated. The double-declining-balance method was used to determine depreciation expense for 2016 and 2017. In 2018, after the 2017 financial statements were issued, the company decided to switch to the straight-line depreciation method for this equipment. At that time, the company's controller discovered that the original cost of the equipment incorrectly included one year of annual maintenance charges for the equipment. Required: 1. Ignoring income taxes, prepare the appropriate correcting entry for the equipment capitalization error discovered in 2018. 2. Ignoring income taxes, prepare any 2018 journal entry(s) related to the change in depreciation methods.
Extracted text: Required 1 Required 2 Ignoring income taxes, prepare the appropriate correcting entry for the equipment capitalization error discovered in 2018. no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Event General Journal Debit Credit Retained earnings Accumulated depreciation Equipment 67,500 52,500 120,000