Hannam Co. decided to change from the declining balance method of depreciation to the straight line method
Question:
Hannam Co. decided to change from the declining balance method of depreciation to the straight line method effective 1 January 20X7. The following information was provided:
The company has a 31 December year end. The tax rate is 20%. No dividends were declared until 20X7; $20,000 of dividends were declared and paid in December 20X7. Income for 20X7, calculated using the new accounting policy, was $105,000.
Required:
Assuming that the change in policy was implemented retrospectively, present the retained earnings reconciliation that would appear in Hannam’s 20X7 statement of changes in equity.
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Related Book For
Intermediate Accounting Volume 1
ISBN: 9781260306743
7th Edition
Authors: Thomas H. Beechy, Joan E. Conrod, Elizabeth Farrell, Ingrid McLeod Dick
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