Question

For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment...

For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2018 for $2,560,000. Its useful life was estimated to be six years 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:

($ 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:
2. Prepare any 2021 journal entry related to the change. (Enter your answers in dollars. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Record the adjusting entry for depreciation in 2021.

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment...
For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2018 for $2,430,000. Its useful life was estimated to be six years, with a $246,000 residual value. At the beginning of 2021, Clinton decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows: ($ in thousands) Year Straight Line Declining Balance Difference 2018 $ 364 $ 810 $ 446...
For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment...
For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2018 for $2,880,000. Its useful life was estimated to be six years with a $240,000 residual value. At the beginning of 2021, Clinton decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows: ($ in thousands) Year Straight-Line Declining Balance Difference 2018 $ 440 $ 960 $ 520 2019...
Alteran Corporation purchased office equipment for $1.5 million at the beginning of 2019. The equipment is...
Alteran Corporation purchased office equipment for $1.5 million at the beginning of 2019. The equipment is being depreciated over a 10-year life using the double-declining-balance method. The residual value is expected to be $300,000. At the beginning of 2021 (two years later), Alteran decided to change to the straight-line depreciation method for this equipment. Required: Prepare the journal entry to record depreciation for 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first...
Alteran Corporation purchased office equipment for $1.4 million at the beginning of 2019. The equipment is...
Alteran Corporation purchased office equipment for $1.4 million at the beginning of 2019. The equipment is being depreciated over a 10-year life using the double-declining-balance method. The residual value is expected to be $600,000. At the beginning of 2021 (two years later), Alteran decided to change to the straight-line depreciation method for this equipment. Required: Prepare the journal entry to record depreciation for 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first...
Alteran Corporation purchased office equipment for $2.0 million at the beginning of 2019. The equipment is...
Alteran Corporation purchased office equipment for $2.0 million at the beginning of 2019. The equipment is being depreciated over a 10-year life using the double-declining-balance method. The residual value is expected to be $800,000. At the beginning of 2021 (two years later), Alteran decided to change to the straight-line depreciation method for this equipment. Prepare the journal entry to record depreciation for 2021.
Annual depreciation expense on equipment purchased a few years ago (using the straight-line method) is $5,000....
Annual depreciation expense on equipment purchased a few years ago (using the straight-line method) is $5,000. The cost of the equipment was $100,000. The current book value of the equipment (January 1, 2021) is $85,000. At the time of purchase, the asset was estimated to have a zero salvage value. On January 1, 2021, the company decided to reduce the original useful life by 25% and to establish a salvage value of $5,000. The firm also decided double-declining-balance depreciation was...
Brief Exercise 22-4 Carla Company changed depreciation methods in 2017 from double-declining-balance to straight-line. Depreciation prior...
Brief Exercise 22-4 Carla Company changed depreciation methods in 2017 from double-declining-balance to straight-line. Depreciation prior to 2017 under double-declining-balance was $95,700, whereas straight-line depreciation prior to 2017 would have been $45,500. Carla’s depreciable assets had a cost of $235,500 with a $36,900 salvage value, and an 7-year remaining useful life at the beginning of 2017. Prepare the 2017 journal entry related to Carla’s depreciable assets (Equipment). (Credit account titles are automatically indented when amount is entered. Do not indent...
1.) Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the...
1.) Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the FIFO method at the beginning of 2018. The inventory as reported at the end of 2017 using LIFO would have been $54,000 higher using FIFO. Retained earnings at the end of 2017 was reported as $720,000 (reflecting the LIFO method). The tax rate is 34%. Required: 1. Calculate the balance in retained earnings at the time of the change (beginning of 2018) as it...
The fact that generally accepted accounting principles allow companies flexibility in choosing between certain allocation methods...
The fact that generally accepted accounting principles allow companies flexibility in choosing between certain allocation methods can make it difficult for a financial analyst to compare periodic performance from firm to firm. Suppose you were a financial analyst trying to compare the performance of two companies. Company A uses the double-declining-balance depreciation method. Company B uses the straight-line method. You have the following information taken from the 12/31/2021 year-end financial statements for Company B: Income Statement Depreciation expense $ 5,000...
Annual depreciation expense on a building purchased a few years ago (using the straight-line method) is...
Annual depreciation expense on a building purchased a few years ago (using the straight-line method) is $4,800. The cost of the building was $96,000. The current book value of the equipment (January 1, 2018) is $81,600. At the time of purchase, the asset was estimated to have a zero salvage value. On January 1, 2018, the company decided to reduce the original useful life by 25% and to establish a salvage value of $4,800. The firm also decided double-declining-balance depreciation...