North Ltd. purchased a building in 20X5 for $1,220,000. Straight-line depreciation was used, with a useful life of 40 years and a residual value of $220,000. A full year of depreciation was charged in 20X5.

In 20X8, the company decided to switch depreciation methods to declining balance, using a rate of 10%. The tax rate is 30%.

Required:

1. Assume this is a change in estimate, and calculate 20X8 depreciation expense.

2. Assume this is a change in policy, and calculate 20X8 depreciation expense and the cumulative effect of the change on 20X8 opening retained earnings.