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For financial reporting, Kumas Poultry Farms has used the declining -balance method of depreciation for conveyor equipment acquired at the beginning of 2021 for $2,704,000. Its useful life was estimated to be six years with a $196,000 residual value. At the beginning of 2024, Kumas decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows: Year ($ in thousands) Straight-Line Declining Balance Difference 2021 $ 418 $ 901 $ 483 2022 418 601 183 2023 418 401 (17) $ 1,254 $ 1,903 $ 649 Required: 2. Prepare any 2024 journal entry related to the change.

For financial reporting, Kumas Poultry Farms has used the declining -balance method of depreciation for conveyor equipment acquired at the beginning of 2021 for $2,704,000. Its useful life was estimated to be six years with a $196,000 residual value. At the beginning of 2024, Kumas decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows: Year ($ in thousands) Straight-Line Declining Balance Difference 2021 $ 418 $ 901 $ 483 2022 418 601 183 2023 418 401 (17) $ 1,254 $ 1,903 $ 649 Required: 2. Prepare any 2024 journal entry related to the change.

FINANCIAL ACCOUNTING
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, Kumas Poultry Farms has used the declining -balance method of depreciation for conveyor equipment acquired at the beginning of 2021 for $2,704,000. Its useful life was estimated to be six years with a $196,000 residual value. At the beginning of 2024, Kumas decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows: Year ($ in thousands) Straight-Line Declining Balance Difference 2021 $ 418 $ 901 $ 483 2022 418 601 183 2023 418 401 (17) $ 1,254 $ 1,903 $ 649 Required: 2. Prepare any 2024 journal entry related to the change.
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 $2,704,000. Its useful life was estimated to be six years with a $196,000 residual value. At the beginning of 2024, Kumas decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows: Year ($ in thousands) Straight-Line Declining Balance Difference 2021 $ 418 $ 901 $ 483 2022 418 601 183 2023 418 401 (17) $ 1,254 $ 1,903 $ 649 Required: 2. Prepare any 2024 journal entry related to the change.
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