Exercise 21-2 Pina Colada Corp., which began operations in January 201?, follows IFRS and is subject to a 30% income tax rate. In 2020, the following evenis took place: 1. The company switched from the zero-prot method to the percentage-ofcompletion method of accounting for its long-ten'n construction projects. This change was a result of experience with the project and improved ability to estimate the costs to completion and therefore the percentage complete. 2. Due to a change in maintenance policy, the estimated useful life of Pina Colada's fleet of trucks was lengthened. 3. It was discovered that a machine with an original cost of $224,000, residual value of $30,400, and useful life of4 years was expensed in error on January 23, 2019, when it was acquired. This situation was discovered after preparing the 2020 adjusting entries but before calculating income tax expense and closing the accounts. Pina Colada uses straightline depreciation and takes a full year of depreciation in the year of acquisition. The asset's cost had been appropriater added to the capital cost allowance [COM class in 2019 before the CD! was calculated and claimed. 4. As a result of an inventory study early in 2020 after the accounts for 2019 had been closed, management decided that the weighted average cost formula would provide a more relevant presentation in the nancial statements than does the FIFO cost formula. In making the change to weighted average cost, Pina Colada determined the following: Inventorthelghted mu Inventory-FIFO can Ann-age can Dec. 31, 2019 $37,000 $72,200 Dec. 31, 2015 135,000 107,200 Dec. 31, 2013Ir 137,000 142,200