During 2019, White Company determined that machinery previously depreciated over a 7-year life had a total estimated useful life of only 5 years. An accounting change was made in 2019 to reflect the change in estimate. If the change had been made in 2018, accumulated depreciation at December 31, 2018, would have been $1,600,000 instead of $1,200,000. As a result of this change, the 2019 depreciation expense was $100,000 greater than it would have been if no change were made. Ignoring income tax considerations, what is the proper amount of the adjustment to Wllite’s January 1, 2019, balance of retained earnings?                                               a. $0                                                                                                               b. $100,000                                                                                                       c. $280,000                                                                                                       d. $400,000

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
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Problem 5MC: During 2019, White Company determined that machinery previously depreciated over a 7-year life had a...
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During 2019, White Company determined that machinery previously depreciated over a 7-year life had a total estimated useful life of only 5 years. An accounting change was made in 2019 to reflect the change in estimate. If the change had been made in 2018, accumulated depreciation at December 31, 2018, would have been $1,600,000 instead of $1,200,000. As a result of this change, the 2019 depreciation expense was $100,000 greater than it would have been if no change were made. Ignoring income tax considerations, what is the proper amount of the adjustment to Wllite’s January 1, 2019, balance of retained earnings?                                               a. $0                                                                                                               b. $100,000                                                                                                       c. $280,000                                                                                                       d. $400,000 

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