Chapter 11, Problem 11.24E

Change in principle; change in depreciation methods

• LO11–2, LO11–6

For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at 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 beginning of 2018, Clinton decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows:

Required:

1. Briefly describe the way Clinton should report this accounting change in the 2016–2018 comparative financial statements.

2. Prepare any 2018 journal entry related to the change.