Question - Harman Inc. purchased machine on January 1, 2012, at a cost of $48,000. The machine is expected to have an estimated salvage value of $3,000 at the end of its 5 year life. The company capitalized the machine and depreciated it in 2012 using the double declining-balance method of amortization. The company has a policy of using the straight-line method to amortize equipment but the company accountant neglected to follow company policy when he used the double declining-balance method. Net earnings for the year ended December 31, 2012 were $55,000 as the result of amortizing the machine incorrectly.
Using the method of amortization that the company normally follows, prepare the correcting entry and determine the corrected net earnings. (Show calculations.)