On January 2, 2016, Getaway Company began expensing certain costs as they are incurred. In...
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Accounting
On January 2, 2016, Getaway Company began expensing certain costs as they are incurred. In the past, the company had treated these costs as a prepaid asset which was then allocated to expense over several years.
On January 2, 2016, the company's records included prepaid expense in the amount of $150,000. The appropriate tax rate is 30%. The cumulative effect on 2016 earnings resulting from this change is:
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