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Alteran Corporation purchased a machine for $1.5 million in 2008. The machine is being depreciated over a 10-year life using the sum-of-the-years'-digits method. The residual value is expected to be $300,000. At the beginning of 2011, Alteran decided to change to the straight-line depreciation method for this machine.
Required:
Prepare the 2011 depreciation adjusting entry.
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How often is the adjustment recalculated?
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Compute the cumulative effect of the change in accounting principle from weighted-average to FIFO inventory pricing.
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