P 20-6 Change in principle; change in depreciation methods LO20-3 During 2022 and 2023, Faulkner Manufacturing...

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P 20-6 Change in principle; change in depreciation methods LO20-3 During 2022 and 2023, Faulkner Manufacturing used the sum-of-the-years'-digits (SYD) method of depreciation for its depreciable assets, for both financial reporting and tax purposes. At the beginning of 2024, Faulkner decided to change to the straight-line method for both financial reporting and tax purposes. A tax rate of 25% is in effect for all years. For an asset that cost $21,000 with an estimated residual value of $1,000 and an estimated useful life of 10 years, the depreciation under different methods is as follows: Year 2022 2023 Straight Line $2,000 2,000 $4,000 SYD $3,636 3.273 $6,909 Difference $1,636 1,273 $2,909 Required: 1. Describe the way Faulkner should account for the change described. Include in your answer any journal entry Faulkner will record in 2024 related to the change and any required note disclosures. 2. Suppose instead that Faulkner previously used straight-line depreciation and changed to sum-of-the-years'-digits in 2024. Prepare any journal entry Faulkner will record in 2024 related to the change and any required note disclosures. P 20-6 Change in principle; change in depreciation methods LO20-3 During 2022 and 2023, Faulkner Manufacturing used the sum-of-the-years'-digits (SYD) method of depreciation for its depreciable assets, for both financial reporting and tax purposes. At the beginning of 2024, Faulkner decided to change to the straight-line method for both financial reporting and tax purposes. A tax rate of 25% is in effect for all years. For an asset that cost $21,000 with an estimated residual value of $1,000 and an estimated useful life of 10 years, the depreciation under different methods is as follows: Year 2022 2023 Straight Line $2,000 2,000 $4,000 SYD $3,636 3.273 $6,909 Difference $1,636 1,273 $2,909 Required: 1. Describe the way Faulkner should account for the change described. Include in your answer any journal entry Faulkner will record in 2024 related to the change and any required note disclosures. 2. Suppose instead that Faulkner previously used straight-line depreciation and changed to sum-of-the-years'-digits in 2024. Prepare any journal entry Faulkner will record in 2024 related to the change and any required note disclosures.