I need help with E 20-10 please

CHAPTER 20 Accounting Changes and Error Corrections 1199 Required: 1. Prepare the journal entry at the beginning of 2021 to record the change in accounting principle. (Ignore income taxes.) 2. Wolfgang should revise reported account balances retrospectively as of the beginning of what year? 3. What amounts will Wolfgang report for net income in its 2019-2021 comparative income statements? E 20-10 Change in For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for con- depreciation veyor equipment acquired at the beginning of 2018 for $2,560,000. Its useful life was estimated to be six years methods with a $160,000 residual value. At the beginning of 2021, Clinton decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows: LO20-3 ($ in thousands) Year Straight-Line Declining Balance Difference 2018 $ 400 $ 853 $453 2019 400 569 169 2020 400 379 (21) $1,200 $1,801 $601 Required: 1. Will Clinton apply the straight-line method retrospectively or apply the straight-line method prospectively? 2. Prepare any 2021 journal entry related to the change. 20-11 The Canliss Milling Company purchased machinery on January 2, 2019, for $800,000. A five-year life was esti- ange in mated and no residual value was anticipated. Canliss decided to use the straight-line depreciation method and reciation recorded $160,000 in depreciation in 2019 and 2020. Early in 2021, the company changed its depreciation method hods to the sum-of-the-years'-digits (SYD) method. 020-3 Required: 1. Will Canliss apply the straight-line method retrospectively or apply the method prospectively? 2. Prepare any 2021 journal entry related to the change. 12 Dreighton Engineering Group receives royalties on a technical manual written by two of its engineers and oyalties sold to William B. Irving Publishing, Inc. Royalties are 10% of net sales, receivable on October 1 for sales in 0-4 January through June and on April 1 for sales in July through December of the prior year. Sales of the manual began in July 2020, and Dreighton accrued royalty revenue of $31,000 at December 31, 2020, as follows: Receivable-royalty revenue ......... 31,000 Royalty revenue ....... 31,000 Dreighton received royalties of $36,000 on April 1, 2021, and $40,000 on October 1, 2021. Irving indicated to Dreighton on December 31 that book sales subject to royalties for the second half of 2021 are expected to be $500,000. Required: 1. Prepare any journal entries Dreighton should record during 2021 related to the royalty revenue. moo off 2. What is the amount of the adjustment, if any, that should be made to retained earnings in the 2020 financial bolsmiles statements? bas The Commonwealth of Virginia filed suit in October 2019, against Northern Timber Corporation seeking civil ncy penalties and injunctionelief for violations of environmental laws regulating forest conservation. When the finan- cial statements were issued in 2020, Northern had not reached a settlement with state authorities, but legal counsel advised Northern Timber that it was probable the ultimate settlement would be $1,000,000 in penalties. The fol- lowing entry was recorded: Loss-litigation ........ 1,000,000 Liability-litigation.. 1,000,000