Exercise 16-22 (Algorithmic) (LO. 3)

For 2019, Essence Company, a calendar year taxpayer, will change from using the cash method for tax purposes to the accrual method. At the end of 2018, Essence showed the following items.

Accounts receivable	$257,300
Accounts payable	154,380
Bank loan	128,650

What is the 481(a) adjustment for this change in accounting method? Indicate whether the adjustment is positive or negative. $ .

Essence will report this amount in its income equally over years beginning in .