9th Edition

ISBN: 9781260216141

Author: SPICELAND

Publisher: MCG CUSTOM

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Textbook Question

Chapter 20, Problem 20.10E

Change in depreciation methods

• LO20–3

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:

Chapter 20, Problem 20.10E, Change in depreciation methods LO203 For financial reporting, Clinton Poultry Farms has used the

Required:

1. Briefly describe the way Clinton should report this accounting change in the 2017–2018 comparative financial statements.
2. Prepare any 2018 journal entry related to the change.

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Chapter 20, Problem 20.9E

Chapter 20, Problem 20.11E

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Chapter 20 Solutions

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Solution Summary: The author explains that change in method of depreciation affects the financial statements of a company prospectively.

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