For financial reporting clinton poultry farms has used the

Question

For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2010 for $2,560,000. Its useful life was estimated to be six years with a $160,000 residual value. At the beginning of 2013, Clinton decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows ($ in 000s):

YEAR               Straight-line                    Declining Balance                           Difference

2010                   $400                              $853                                                 $453

2011                    400                                 569                                                   169

2012                    400                                 379                                                   (21)

Total                     $1,200                            $1,801                                               $601

REQUIRED

1. Briefly describe the way Clinton should report this accounting change in the 2012–2013 comparative financial statements.

2. Prepare any 2013 journal entry related to the change.