Business

Julio Bridges

16 December, 08:30

For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2013 for $2,784,000. Its useful life was estimated to be six years with a $216,000 residual value. At the beginning of 2016, Clinton decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows ($ in 000s):

Year Straight-Line Declining Balance Difference

2013 $ 428 $ 928 $ 500

2014 428 618 190

2015 428 413 (15)

$ 1,284 $ 1,959 $ 675

Required:

Prepare any 2016 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.) Record the adjusting entry for depreciation in 2016.