Larry Corp. purchased a capital asset for $184,000 in early 2013. Management estimated that the asset would have a 10-year life with an estimated residual value of $37,000 and would be depreciated on a straight-line basis with a full years depreciation in the year of purchase. In 2015, management decides to change the depreciation method to 10% declining balance. This is a change in policy because the change is motivated by a desire to conform to industry practice. The tax rate is 40%.

Required:

1. Calculate depreciation expense for 20132015, inclusive, using the old policy and then the new policy.

	Straight-line	Declining balance
2013
2014
2015

2. Calculate the effect of the change on opening 2015, 2014, and 2013 retained earnings, if any.

Impact on opening retained earnings
2013
2014
2015