For financial reporting Clinton Poultry Farms has used the d

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 ( in 000s) Year Straight-Line Declining Balance 2015 2016 2017 $ 400 400 400 $1,200 $ 853 569 379 $1,801 Difference $453 169 (21) $601 Required: 2. Prepare any 2018 journal entry related to the change. (Enter your answers in dollars rounded to the nearest thousand. If no entry is required for a transaction/event, select \"No journal entry required\" in the first account field.) View transaction list Journal entry worksheet Record the adjusting entry for depreciation in 2018 Note: Enter debits before credits Event General Journal Debit Credit Record entry Clear entry View general journal

Solution

No journal entry related to change Adjusting entry for depreciation expense will be made at end of December 31,2018 Asset\'s cost 2,560,000 Accumulated depreciation (given) 1,801,000 Book value as on Jan 1,2018 759,000 less :Estimated residual value 160,000 to be depreciated over the remaining 3 years 599,000 Depreciation expense under straight line 199666.7 Event General Journal Debit Credit 1) Depreciation expense 199667 Accumulated depreciation 199667