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(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? (Enter O if no amount is to be reported. Do not leave any field blank.) Adjustment to the beginning balance of retained earnings LA

(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? (Enter O if no amount is to be reported. Do not leave any field blank.) Adjustment to the beginning balance of retained earnings LA

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concord Company placed an asset in service on January 2, 2015. Its cost was $1,134,000 with an estimated service life of 6 years. Salvage value was estimated to be $99,000. Using the doubledeclining-balance method of depreciation, the depreciation for 2015, 2016, and 2017 would be $378,000, $252,000, and $168,000 respectively. During 2017 the company's management decided to change to the straight-line method of depreciation. Assume a 35% tax rate. (a) Your answer is correct. How much depreciation expense will be reported in the income from continuing operations of the company's income statement for 2017? (Hint: Use the new depreciation in the current year.) Depreciation expense $ 101250
Transcribed Image Text:Concord Company placed an asset in service on January 2, 2015. Its cost was $1,134,000 with an estimated service life of 6 years. Salvage value was estimated to be $99,000. Using the doubledeclining-balance method of depreciation, the depreciation for 2015, 2016, and 2017 would be $378,000, $252,000, and $168,000 respectively. During 2017 the company's management decided to change to the straight-line method of depreciation. Assume a 35% tax rate. (a) Your answer is correct. How much depreciation expense will be reported in the income from continuing operations of the company's income statement for 2017? (Hint: Use the new depreciation in the current year.) Depreciation expense $ 101250
(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? (Enter O if no amount is to be reported. Do not leave any field blank.) Adjustment to the beginning balance of retained earnings 10
Transcribed Image Text:(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? (Enter O if no amount is to be reported. Do not leave any field blank.) Adjustment to the beginning balance of retained earnings 10
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