Method of depreciation for its depreciable assets

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During 2011 and 2012, 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 2013, Faulkner decided to change to the straight line method for both financial reporting and tax purposes. A tax rate of 40% 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: 

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Required:
1. Describe the way Faulkner should account for the change described. Include in your answer any journal entry Faulkner will record in 2013 related to the change and any required footnote disclosures.
2. Suppose instead that Faulkner previously used straight line depreciation and changed to sum of the years  digits in 2013. Describe the way Faulkner should account for the change. Include in your answer any journal entry Faulkner will record in 2013 related to the change and any required footnotedisclosures.

Reference no: EM13879162

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