ACC - P22-6, Madrasa Inc

"On December 31, 2010, before the books were closed, the management and accountants of Madrasa Inc. made the following determinations about three depreciable assets.
"      
      
1. Depreciable asset A was purchased January 2, 2007. It originally cost     _____________ 
and, for depreciation purposes, the straight-line method was originally chosen. The asset was originally      
expected to be useful for _________  years and have a zero salvage value. In 2010, the   
decision was made to change the depreciation method from straight-line to sum-of-years'-digits, and      
the estimates relating to useful life and salvage value remained unchanged.      
2. Depreciable asset B was purchased January 3, 2006. It originally cost       
and, for depreciation purposes, the straight-line method was chosen. The asset was originally      
expected to be useful for  ______ years and have a zero salvage value. In 2010, the   
decision was made to shorten the total life of this asset to     ____ years and to
estimate the salvage value at  ____________   
3. Depreciable asset C was purchased January 5, 2006. The asset's original cost was       ____________
and this amount was entirely expensed in 2006. This particular asset has a 10-year useful life and no salvage value. The straight-line method was chosen for depreciation purposes.      
      
      
Additional data:      
1. Income in 2010 before depreciation expense amount to    ____________  
2. Depreciation expense on assets other than A, B, and C totaled     _________  in 2010.
3. Income in 2009 was reported at   ___________   
4. Ignore all income tax effects.      
5. ____________ shares of common stock were outstanding in 2009 and 2010.    
      
Instructions:      
(a) Prepare all necessary entries in 2010 to record these determinations.      
(b) Prepare comparative retained earnings statements for Madrasa Inc. for 2009 and 2010. The company had retained earnings of_________at December 31, 2008.