Martin Motors purchased a machine that will help diagnose problems with engines. The machine cost $210,000 on January 10, 2010 and a residual value of $10,000 was anticipated, with a useful life of 5 years. These statistics are available:
DDB
Gross Profit 400,000
Operating expenses 180,000
Income before depreciation and taxes 220,000
Depreciation 84,000
Income before taxes 136,000
Taxes (35%) 47,600
Net Income 88,400
Martin Motors realized at the beginning of 1012 that the machine would last an additional 8 years. Martin Motors uses the DDB method.
Required:
Prepare the appropriate journal entry to record the depreciation expense for 2012