For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquiredat the beginning of 2018 for $2,800,000. Its useful life was estimated to be six years with a $220,000 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-Line430438438$1,290View transaction list($ in thousands)Declining Balance$ 933622415$1,970Required:2. Prepare any 2021 Journal entry related to the change. (Enter your answers in dollars. If no entry is required for atransaction/event, select "No Journal entry required" In the first account field.)Journal entry worksheet< 1Note: Enter debits before credits.Event1Record entryRecord the adjusting entry for depreciation in 2021.Difference$503192(15)General JournalClear entry$680DebitCreditView 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 $2,800,000. Its useful life was estimated to be six years with a $220,000 residual value

Journal entry is the procedure for initially documenting commercial transactions in the books of…

Business

Accounting

For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2018 for $2,800,000. Its useful life was estimated to be six years with a $220,000 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 $ 430 430 430 $1,290 ($ in thousands) Declining Balance $ 933 622 415 $1,970 Difference $503 192 (15) $680 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 fleld.)

For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2018 for $2,800,000. Its useful life was estimated to be six years with a $220,000 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 $ 430 430 430 $1,290 ($ in thousands) Declining Balance $ 933 622 415 $1,970 Difference $503 192 (15) $680 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 fleld.)

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 7RE: Bliss Company owns an asset with an estimated life of 15 years and an estimated residual value of...

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Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

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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 $2,800,000. Its useful life was estimated to be six years with a $220,000 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
430
438
438
$1,290
View transaction list
($ in thousands)
Declining Balance
$ 933
622
415
$1,970
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.)
Journal entry worksheet
< 1
Note: Enter debits before credits.
Event
1
Record entry
Record the adjusting entry for depreciation in 2021.
Difference
$503
192
(15)
General Journal
Clear entry
$680
Debit
Credit
View general journal

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