Question - For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2008 for $2,560,000. Its useful life was estimated to be six years with a $160,000 residual value. At the beginning of 2011, Clinton decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows ($ in 000s):
|
Year
|
Straight-Line
|
Declining Balance
|
Difference
|
|
2008
|
$400
|
$853
|
$453
|
|
2009
|
400
|
569
|
169
|
|
2010
|
400
|
379
|
(21)
|
|
$1,200
|
$1,801
|
$601
|
Required: Prepare any 2011 journal entry related to the change.