Merrick Inc. follows IFRS and is adjusting and correcting its books at the end of 2017. In reviewing its records, the following information has been compiled:
1. In 2017, the depreciation method on plant assets should be changed from sum-of-the-years'-digits to the straight- line method due to a change in pattern of usage. The assets were purchased at the beginning of 2016 for $90,000 with an estimated useful life of four years and no residual value. Merrick has already recorded 2017 depreciation expense of $27,000 related to the assets, using the sum-of-the-years'-digits method.
2. Ending inventory for 2016 was overstated by $20,000; Ending inventory for 2017 is correctly stated.
3. The adjusted trial balance at December 31, 2015 includes the following amounts: Cash $38,000; Inventory $112,000; Accounts Payable $48,000; Retained Earnings $72,000.
4. Dividends of $30,000 and $25,000 were declared and paid on December 31, 2017 and December 31, 2016, respectively.
5. Share capital of $30,000 consists of 20,000 common shares outstanding since the company's inception.
Merrick's statement of financial position and income statement are as follows at December 31, 2016 and 2017, before any corrections related to the information above. The December 31, 2017 statements are in draft form only and the 2017 accounts have not yet been closed.

Instructions
(a) Prepare the comparative income statement and comparative statement of changes in equity for 2017, and the comparative statement of financial position as at December 31, 2017. Ignore income tax effects. Do not prepare notes to the financial statements.
(b) Identify other possible accounting treatments for the change in depreciation method under alternative circumstances.

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MERRICK INC. Statement of Financial Position As at December 31, 2017 2016 Assets Cash Inventory Plant assets, net Total assets 2017 $60,000 107,000 $34,000 128,000 27,000 54,000 $194,000 $216,000 Liabilities and Shareholders' Equity Accounts payable Share capital Retained earnings Total liabilities and shareholders' equity $17,000 30,000 147,000 $194,000 $ 61,000 30,000 125,000 $216,000 MERRICK INC. Income Statement Year Ended December 31, 2017 2017 2016 $270,000 142,000 128,000 50,000 $78,000 $340,000 Sales Cost of goods sold Gross proft Operating expenses Net income 200,000 140,000 88,000 52,000