In 2008, Miller Company changed its method of depreciating long-term assets. The summary effect of those changes is as follows:

Net income was $117,000, $111,000, and $82,000 for 2008, 2007, and 2006, respectively. The income tax rate is 30%.
1. Compute the reported net income for each year if three years of financial statements are issued at the end of 2008.
2. Compute the amount of adjustment that would be made to Retained Earnings as of January 1,2006.

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old MethodNew Method Depreciation expense-2008 Depreciation expense-2007 Depreciation expense-2006 Depreciation expense 2005 and before $21,000 24,000 29,000 42,000 $19,000 20,000 21.000 32000