For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquiredat the beginning of 2018 for $3,250,000. Its useful life was estimated to be five years, with a $255,000 residual value. At the beginningof 2021, Clinton decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows:Year201820192020Straight Line$ 599View transaction list<599599$1,7971($ in thousands)Journal entry worksheetRequired:2. Prepare any 2021 journal entry related to the change. (If no entry is required for a transaction/event, select "No journal entryrequired" in the first account field. Enter your answers in whole dollars.)Event1Declining Balance$1,300780468$2,548Record depreciation expense entry for 2021.Note: Enter debits before credits.Record entryGeneral JournalDifference$ 701Clear entry181(131)$ 751DebitCreditView general journal

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Description: For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquiredat the beginning of 2018 for $3,250,000. Its useful life was estimated to be five years, with a $255,000 residual val

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For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2018 for $3,250,000. Its useful life was estimated to be five years, with a $255,000 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: Year 2018 2019 2020 Straight Line $ 599 599 599 $1,797 View transaction list < Journal entry worksheet ($ in thousands) Declining Balance $1,300 780 468 $2,548 Required: 2. Prepare any 2021 journal entry related to the change. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) 1 Record depreciation expense entry for 2021. Note: Enter debits before credits. Event 1 Record entry General Journal Difference $701 Clear entry 181 (131) $ 751 Debit Credit View general journal

For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2018 for $3,250,000. Its useful life was estimated to be five years, with a $255,000 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: Year 2018 2019 2020 Straight Line $ 599 599 599 $1,797 View transaction list < Journal entry worksheet ($ in thousands) Declining Balance $1,300 780 468 $2,548 Required: 2. Prepare any 2021 journal entry related to the change. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) 1 Record depreciation expense entry for 2021. Note: Enter debits before credits. Event 1 Record entry General Journal Difference $701 Clear entry 181 (131) $ 751 Debit Credit View general journal

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2018 for $2,816,000. Its useful life was estimated to be six years with a $224,000 residual value. At the beginning of 2021, Clinton decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows: ($ in thousands) Year Straight-Line Declining Balance Difference 2018 $ 432 $ 938 $ 506 2019 432 626 194 2020 432 417 (15 ) $ 1,296 $ 1,981 $ 685 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.)
Warhol Enterprises purchased a spray painter at the beginning of 2018 at a cost of $150,000. Costs for training personnel on usage of this painter were $200. Warhol estimated that the spray painter would have a residual value of $30,000. The company decided to use declining-balance method of depreciation at a rate of 20%. Two years later, at the end of 2020, Warhol sold the spray painter for $120,000.a. Calculate the book value of the spray painter at the end of 2018 and the end of 2019, prior to its sale.b. Calculate the gain or loss on the sale of the spray painter.c. Calculate the income statement effect, assuming that Warhol decided to give the spray painter to a charitable foundation.
Mustang Company changed from straight line depreciation to double declining balance method at the beginning of 2021. The plant asset originally cost P1,500,000 in 2016 using the straight-line depreciation. Periodic depreciation using the straight-line method is P60,000. What amount of depreciation should Mustang recognize for the year 2021?
Ivanhoe Ltd. purchased a piece of equipment on January 1, 2019, for $1,275,000. At that time, it was estimated that the mad would have a 15-year life and no residual value. On December 31, 2023, Ivanhoe's controller found that the entry for depreciation expense was omitted in error in 2020. In addition, Ivanhoe planned to switch to double-declining-balance depreciation beca change in the pattern of benefits received, starting with the year 2023. Ivanhoe currently uses the straight-line method for depreciating equipment. Ivanhoe Ltd. follows IFRS.
Blossom Company purchased a warehouse on January 1, 2019, for $480,000. At the time of purchase, Blossom anticipated that the warehouse would be used to facilitate the expansion of its product lines. The warehouse is being depreciated over 20 years and is expected to have a residual value of $60,000. At the beginning of 2024, the company decided that the warehouse would no longer be used and should be sold for its carrying amount. At the end of 2024, the warehouse still had not been sold, and its net realizable value was estimated to be only $312,000. Prepare all the journal entries that Blossom should make during 2024 related to the warehouse. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry isrequired,select Indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the Amounts. List debit entry before credit entry.)
For financial reporting, Kumas Poultry Farms has used the declining-balance method of depreciation for conveyer. equipment acquired at the beginning of 2021 for $2,560,000. Its useful life was estimated to be six years with a $160,000 residual value. At the beginning of 2024, Kumas decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows: Year 2021 2022 2023 Straight-Line $ 400 400 400 $ 1,200 View transaction list ($ in thousands) Declining Balance $ 853 569 379 $ 1,801 Required: 2. Prepare any 2024 journal entry related to the change. Note: Enter you answers rounded to the nearest dollar. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Journal entry worksheet 1 Difference. $ 453 169 (21) $ 601 Record the adjusting entry for depreciation in 2024. Note: Enter debits before credits.
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The Catherine Company, effective January 1, 2020, made the following accounting change: Catherine changed its depreciation method from double-declining-balance to the straight-line method on equipment purchased on January 1, 2018, at a cost of $400,000. The equipment had an estimated useful life of five years and a $30,000 residual value. Catherine is subject to an income tax rate of 30% and can justify the changes. Required:a. Calculate the 2020 depreciation expense.$fill in the blank 1 b. Calculate the the December 31, 2020, accumulated depreciation balance on the equipment.
Tracy Ltd. purchased a piece of equipment on January 1, 2016, for $1,260,000. At that time, it was estimated that the machine would have a 15-year life and no residual value. On December 31, 2020, Tracy’s controller found that the entry for depreciation expense was omitted in error in 2017. In addition, Tracy planned to switch to double-declining-balance depreciation because of a change in the pattern of benefits received, starting with the year 2020. Tracy currently uses the straight-line method for depreciating equipment. Prepare the general journal entries, if any, the accountant should make at December 31, 2020. (Ignore tax effects.) (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round the rate of deprecition under double decling balance method to 5 decimal places, ie. 13.33333%. Round answers to 0 decimal places, e.g. 5,125.)…
For financial reporting, Kumas Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2021 for $2,736,000. Its useful life was estimated to be six years with a $204,000 residual value. At the beginning of 2024, Kumas decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows: ($ in thousands) Declining Balance Difference Year 2021 Straight- Line $ 422 $ 912 $ 490 2022 2023 422 422 608 186 405 (17) $ 1,266 $ 1,925 $ 659 Required: 2. Prepare any 2024 journal entry related to the change. Note: Enter you answers rounded to the nearest dollar. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet 1 Record the adjusting entry for depreciation in 2024. Note: Enter debits before credits. Event 1 General Journal Debit Credit Record entry Clear entry View general journal
For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2021 for $2,880,000. Its useful life was estimated to be four years, with a $168,000 residual value. At the beginning of 2024, Clinton decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows: ($ in thousands) Year Straight Line Declining Balance Difference 2021 $ 678 $ 1,440 $ 762 2022 678 720 42 2023 678 360 (318) $ 2,034 $ 2,520 $ 486 Required: 2. Prepare any 2024 journal entry related to the change.