Question
For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2013 for $2,768,000. Its
For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2013 for $2,768,000. Its useful life was estimated to be six years with a $212,000 residual value. At the beginning of 2016, Clinton decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows ($ in 000s):
Year | Straight-Line | Declining Balance | Difference | ||||||
2013 | $ | 426 | $ | 922 | $ | 496 | |||
2014 | 426 | 615 | 189 | ||||||
2015 | 426 | 410 | (16 | ) | |||||
$ | 1,278 | $ | 1,947 | $ | 669 | ||||
Required: |
2. | Prepare any 2016 journal entry related to the change. (Enter your answers in dollars rounded to the nearest thousand. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) |
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