For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquiredat the beginning of 2015 for $2,560,000. Its useful life was estimated to be six years with a $160,000 residual value. At the beginningof 2018, Clinton decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows ($in 000s):Year2015Straight-Line$ 40020162017400400$1,200Declining Balance$ 853569Difference$453169379$1,801(21)$601Required:2. Prepare any 2018 journal entry related to the change. (Enter your answers in dollars rounded to the nearest thousand. If no entryis required for a transaction/event, select "No journal entry required" in the first account field.)View transaction listJournal entry worksheet1Record the adjusting entry for depreciation in 2018.Note: Enter debits before credits.Event1General JournalDebitCredit

Clinton Poultry Farms - 2018 Journal Entry for Depreciation ChangeSince Clinton Poultry Farms is…

Answered: For financial reporting, Clinton…

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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Howarth Manufacturing Company purchased equipment on June 30, 2017, at a cost of $800,000. The residual value of the equipment was estimated to be $50,000 at the end of a five-year life. The equipment was sold on March 31, 2021, for $170,000. Howarth uses the straight-line depreciation method for all of its plant and equipment. Partial-year depreciation is calculated based on the number of months the asset is in service. ces Required: 1. Prepare the journal entry to record the sale. 2. Assuming that Howarth had instead used the double-declining-balance method, prepare the journal entry to record the sale. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Assuming that Howarth had instead used the double-declining-balance method, prepare the journal entry to record the sale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) General Journal No 1 Event 1 Cash Accumulated…
Gwynedd Industries uses straight-line depreciation on all of its depreciable assets. The company records annual depreciation expense at the end of each calendar year. On January 1, 2020, the company purchased a machine costing $170,000, and it has an estimated useful life of 15 years and an estimated residual value of $26,000. Depreciation for partial years is rounded to the nearest full month. In 2024, management decided to revise its estimated life from 18 years to 25 years. No change was made in the estimated residual value. The revised estimate of the useful life was decided prior to recording annual depreciation expense for the year ended December 31, 2024. Instructions: a) Prepare journal entries in chronological order for the given events, beginning with the purchase of machinery on January 1, 2020. Record depreciation expense separately for each year 2020 through 2024 (5 separate entries for each year's depreciation) (Hint: record the purchase and annual depreciation for each…
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.)
On July 2, 2013, Sable Company purchased a building for $300,000 that had an estimated residual value of $46,000 and an expected useful life of ten years. Sable Company has a December 31st, year end. If Sable Company uses the Declining Balance Method at the straight-line rate, the depreciation expense for year two is: $27000, $28500, $25400, $30000, or none of the above
At the beginning of 2016, Foley Airline purchased a used airplane at a cost of $33,500,000. Foley Airline expects the plane to remain useful for eight years (4,000,000 miles) and to have a residual value of $5,500,000. Foley Airline expects the plane to be flown 1,300,000 miles the first year and 1,200,000 miles the second year. Requirements 1. Compute second-year (2017) depreciation expense on the plane using the following methods: a. Straight-line b. Units-of-production c. Double-declining-balance 2. Calculate the balance in Accumulated Depreciation at the end of the second year for all three methods. Requirement 1a. Compute second-year (2017) depreciation expense on the plane using the straight-line method. Begin by selecting the formula to calculate the company's second-year depreciation expense on the plane using the straight-line method. Then enter the amounts and calculate the depreciation expense for the second year. Straight-line depreciation
007 M cted net 37,750 Wages Paya Depreciation Expense-Equipment; and Supplies 2. Determine the balances of the accounts affected by the adjusting entries, and prepare an adjusted trial balance. OBJ. 2, 3 PR 3-6A Adjusting entries and errors At the end of April, the first month of operations, the following selected data were taken from the financial statements of Shelby Crawford, an attorney: Net income for April Total assets at April 30 Total liabilities at April 30 Total owner's equity at April 30 $120,000 750,000 300,000 450,000 In preparing the financial statements, adjustments for the following data were overlooked: a. Supplies used during April, $2,750. b. Unbilled fees earned at April 30, $23,700. c. Depreciation of equipment for April, $1,800. d. Accrued wages at April 30, $1,400.
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.
Irwin, Inc., constructed a machine at a total cost of $35 million. Construction was completed at the end of 2014and the machine was placed in service at the beginning of 2015. The machine was being depreciated over a10-year life using the sum-of-the-years’-digits method. The residual value is expected to be $2 million. At thebeginning of 2018, Irwin decided to change to the straight-line method. Ignoring income taxes, what journalentry(s) should Irwin record relating to the machine for 2018?
On January 1, 2016 Murgatroyd Co. purchased equipment for OMR 30,000, estimating a four-year useful life and no residual value. In 2016 and 2017, Murgatroyd depreciated the asset using the sum-of-years'-digits method. In 2018, Murgatroyd changed to straight-line depreciation for this equipment. What depreciation would Murgatroyd record for the year 2018 on this equipment? Select one: A. 9,000 B. 6,500 C. 12,000 D. 4,500
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

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