Tianan Corp. acquired equipment in 20X1 for $200,000. Management instructed the accounting staff to depreciate the equipment on a 20% declining balance rate. In 20X3, as the year-end financial statements are being prepared, the chief accountant discovers that the equipment had been depreciated over the previous two years at 25% instead of 20%. Tianan’s income tax rate is 30%.

Required:
1. Calculate the amounts of the adjustments that should be made to opening retained earnings in the comparative statements of changes in equity for each of 20X2 and 20X3.
2. Provide the 20X3 entries to record 20X3 depreciation and to correct the previous years’ error.