Question

Problem 22-1 (Part Level Submission) Holtzman Company is in theprocess of preparing its financial statements for 2014. Assume thatno entries for depreciation have been recorded in 2014. Thefollowing information related to depreciation of fixed assets isprovided to you. 1. Holtzman purchased equipment on January 2,2011, for $68,000. At that time, the equipment had an estimateduseful life of 10 years with a $4,000 salvage value. The equipmentis depreciated on a straight-line basis. On January 2, 2014, as aresult of additional information, the company determined that theequipment has a remaining useful life of 4 years with a $2,500salvage value. 2. During 2014, Holtzman changed from thedouble-declining-balance method for its building to thestraight-line method. The building originally cost $200,000. It hada useful life of 10 years and a salvage value of $23,000. Thefollowing computations present depreciation on both bases for 2012and 2013. 2013 2012 Straight-line $17,700 $17,700 Declining-balance32,000 40,000 3. Holtzman purchased a machine on July 1, 2012, at acost of $180,000. The machine has a salvage value of $10,000 and auseful life of 8 years. Holtzman’s bookkeeper recordedstraight-line depreciation in 2012 and 2013 but failed to considerthe salvage value. Collapse question part (a) Partially correctanswer. Your answer is partially correct. Try again. Prepare thejournal entries to record depreciation expense for 2014 and correctany errors made to date related to the information provided.(Ignore taxes.) (Credit account titles are automatically indentedwhen amount is entered. Do not indent manually. If no entry isrequired, select "No Entry" for the account titles and enter 0 forthe amounts.) No. Account Titles and Explanation Debit Credit 1.Entry field with correct answer Depreciation Expense Entry fieldwith correct answer 11575 Entry field with correct answer Entryfield with correct answer Accumulated Depreciation-Equipment Entryfield with correct answer Entry field with correct answer 11575 2.Entry field with correct answer Depreciation Expense Entry fieldwith correct answer 13125 Entry field with correct answer Entryfield with correct answer Accumulated Depreciation-Building Entryfield with correct answer Entry field with correct answer 13125 3.Entry field with correct answer Depreciation Expense Entry fieldwith incorrect answer Entry field with correct answer Entry fieldwith correct answer Accumulated Depreciation-Machinery Entry fieldwith correct answer Entry field with incorrect answer (To recordcurrent year depreciation.) Entry field with correct answerAccumulated Depreciation-Machinery Entry field with incorrectanswer Entry field with correct answer Entry field with correctanswer Retained Earnings Entry field with correct answer Entryfield with incorrect answer (To correct prior year depreciation.)SHOW LIST OF ACCOUNTS SHOW SOLUTION SHOW ANSWER LINK TO TEXT LINKTO TEXT LINK TO TEXT Attempts: 3 of 3 used Collapse question part(b) Show comparative net income for 2013 and 2014. Income beforedepreciation expense was $270,310 in 2014, and was $292,290 in2013. (Ignore taxes.) HOLTZMAN COMPANY Comparative IncomeStatements For the Years 2014 and 2011 2014 2013 Income beforedepreciation expense $ $ Depreciation expense Net income