Expand Your Critical Thinking 9-7

Monty Corporation is suffering declining sales of its principal product, nonbiodegradeable plastic cartons. The president, Robert Griffin, instructs his controller, Alexis Landrum, to lengthen asset lives to reduce depreciation expense. A processing line of automated plastic extruding equipment, purchased for $2.20 million in January 2019, was originally estimated to have a useful life of 8 years and a salvage value of $280,000. Depreciation has been recorded for 2 years on that basis. Robert wants the estimated life changed to 12 years total, and the straight-line method continued. Alexis is hesitant to make the change, believing it is unethical to increase net income in this manner. Robert says, Hey, the life is only an estimate, and Ive heard that our competition uses a 12-year life on their production equipment.

What is the effect of Robert Griffins proposed change on income before taxes in the year of change?

Income before income taxes in the year of change has increased by $?

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