For financial reporting, Kumas Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2021 for $2,752,000. Its useful life was estimated to be six years with a $208,000 residual value. At the beginning of 2024, Kumas decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows: Year ($ in thousands) Straight-Line Declining Balance Difference 2021 $ 424 $ 917 $ 493 2022 424 611 187 2023 424 408 (16) $ 1,272 $ 1,936 $ 664

For financial reporting, Kumas Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2021 for $2,752,000. Its useful life was estimated to be six years with a $208,000 residual value. At the beginning of 2024, Kumas decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows: Year ($ in thousands) Straight-Line Declining Balance Difference 2021 $ 424 $ 917 $ 493 2022 424 611 187 2023 424 408 (16) $ 1,272 $ 1,936 $ 664

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

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 8P: Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of...

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Year	($ in thousands)
2021	$ 424	$ 917	$ 493
2022	424	611	187
2023	424	408	(16)
	$ 1,272	$ 1,936	$ 664

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