Change in Depreciation Method MTC Corporation paid $300,000 for equipment with an expected economic life of 10 years and scrap value of $25,000. For the first 2 years, MTC used double-declining-balance depreciation. On the first day of the third year of ownership, MTC elected to change to straight-line depreciation.

a. Determine the depreciation expense reported by MTC Corporation for each of the first 2 years and the balance in accumulated depreciation at the end of the second year.

b. Determine the amount of depreciation expense MTC Corporation would have recorded for each of the first 2 years using straight-line depreciation and the amount of accumulated depreciation that would that would have been reported at the end of the second year.

c. Determine the amount of the cumulative adjustment to be reported in the income statement for the third year as a result of the change in depreciation methods.

d. By what amount did the change in depreciation methods change reported net income for the third year?