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 $208,000 residual value. At the beginning of 2024, Kumas decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows: ($ in thousands) Year Straight Line Declining Balance Difference 2021 $ 424 $ 917 $ 493 2022 424 611 187 2023 424 408 (16) $ 1,272 $ 1,936 $ 664 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.
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 $208,000 residual value. At the beginning of 2024, Kumas decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows: ($ in thousands) Year Straight Line Declining Balance Difference 2021 $ 424 $ 917 $ 493 2022 424 611 187 2023 424 408 (16) $ 1,272 $ 1,936 $ 664 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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 $208,000 residual value. At the beginning of 2024, Kumas
decides to change to the straight-line method. The effect of this change on
depreciation for each year is as follows:
($ in thousands)
Year
Straight
Line
Declining
Balance
Difference
2021
$ 424
$ 917
$ 493
2022
424
611
187
2023
424
408
(16)
$ 1,272
$ 1,936
$ 664
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.
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