For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2018 for $2,816,000. Its useful life was estimated to be six years with a $224,000 residual value. At the beginning of 2021, Clinton decided to change to the straight-line method. The effect of this change on depreciation for each year is as follows: Year Straight-Line Declining Balance Difference
2010 $400 $853 $453
2011 400 569 169
2012 400 379 (21)

$1,200 $1,801 $601

Required:
Prepare any 2018 journal entry related to the change.

Debit Depreciation expense for $263,667

Credit Accumulated depreciation for $263,667

Explanation:

Note: There are some inconsistencies in the dates used in the question. These are therefore corrected before answering the question by presenting the complete question with the correct dates as follows:

For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2018 for $2,816,000. Its useful life was estimated to be six years with a $224,000 residual value. At the beginning of 2021, Clinton decided to change to the straight-line method. The effect of this change on depreciation for each year is as follows:

Year       Straight-Line         Declining Balance     Difference

2018             $400                         $853                     $453

2019               400                           569                        169

2020              400                           379                        (21)  

                  $1,200                        $1,801                     $601

Required:

Prepare any 2021 journal entry related to the change.

The explanation of the answer is now given as follows:

Before preparing the related journal entry, the annual straight-line depreciation for remaining 3 years is first calculated:

Details                                                                      Amount ($)

Asset’s cost at the beginning (given)                    2,816,000

Accumulated depreciation to date                       (1,801,000)    

Undepreciated cost                                                 1,015,000

Estimated residual value                                        (224,000)

To be depreciated over remaining 3 years             791,000  

Annual straight-line depreciation for remaining 3 years = $791,000/ 3 = $263,667

The 2021 journal entry related to the change will look as follows:

Account title                                          Debit ($)         Credit ($)    

Depreciation expense                           263,667

 To Accumulated depreciation                                    263,667

(To record 2021 depreciation expense.)                                        

answer; the landlord can sue the renter,and the renter loses the security deposit;