In Year 10, the Perasso Meat Packing Company changed the depreciation method used from the straight-line method to an accelerated method. Depreciation recorded in prior years on existing equipment was $126,000 applying the straight- line method. Depreciation in prior years would have been $186,000 if the accelerated method had been used. Assuming an income tax rate of 20%, Perasso's increase in Year 10's beginning retained earnings would be: A. $80,000 B. $48,000 C. $32,000 D. $0

In Year 10, the Perasso Meat Packing Company changed the depreciation method used from the straight-line method to an accelerated method. Depreciation recorded in prior years on existing equipment was $126,000 applying the straight- line method. Depreciation in prior years would have been $186,000 if the accelerated method had been used. Assuming an income tax rate of 20%, Perasso's increase in Year 10's beginning retained earnings would be: A. $80,000 B. $48,000 C. $32,000 D. $0

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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