Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. e4.14b (lo 4) (change in accounting principle) tom

E4.14B (LO 4) (Change in Accounting Principle) Tom Zuluaga Company placed an asset in service...

70.2K

Verified Solution

Question

Accounting

image
E4.14B (LO 4) (Change in Accounting Principle) Tom Zuluaga Company placed an asset in service on January 2, 2018. Its cost was $1,350,000 with an estimated service life of 6 years. Salvage value was estimated to be $90,000. Using the double- declining-balance method of depreciation, the depreciation for 2018, 2019, and 2020 would be $450,000, $300,000, and $200,000 respectively. During 2020, the company's management decided to change to the straight-line method of depreciation Assume a 35% tax rate Instructions (a) How much depreciation expense will be reported in the income from continuing operations of the company's income statement for 2020? (Hint: Use the new depreciation in the current year.) (b) What amount will be reported as an adjustment to the beginning balance of retained earnings to reflect the effect of the change in accounting principle

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students