Answer:
Would report depreciation expense of $400,000 in its 2021 income statement
Explanation:
Calculation to determine what John will report as depreciation expense
First step is to calculate the Book value at 1/1/2021
Book value at 1/1/2021= $3,000,000 [(5/15 x $3,000,000) + (4/15 x $3,000,000)
Book value at 1/1/2021= $1,200,000
Now let calculate the New depreciation
New depreciation= $1,200,000 ÷3
New depreciation= $400,000 per year for 2021-2023
Therefore To account for the change in 2021, John Inc.:Would report depreciation expense of $400,000 in its 2021 income statement
