Pitchfork Corporation is preparing its 2018 financial statements. Income from Continuing Operations (ICO) for 2018 was determined to be $1,400,000, but upon further review, Pitchfork's accountant is not certain this number is accurate. The Company has a corporate tax rate of 30%. Additionally, the company reports one year of financial data on the face of the financial statements. Use the following information to determine the adjustments, if any, to correctly report Income From Continuing Operations.

1. During 2018, Pitchfork experienced a labor strike which closed down the operations of one of its plants for an entire month. The pretax loss of $680,000 was excluded when determining Income from Continuing Operations because the bookkeeper was uncertain if this event qualified for discontinued operations, although the plant was re-opened after the strike was settled and did not represent a strategic shift in the on-going operations for Pitchfork. Additionally, this plant did not qualify as a component of Pitchfork.

Determine the adjustment (if any) to correct Income from Continuing Operations (ICO) for the labor strike. $___NE (stike is not a strategical shift)______

2) On May 1, 2017, Pitchfork received $180,000 cash in advance for consulting services to be performed evenly over the next three years. When Pitchfork recorded the transaction, the bookkeeper credited Service Revenue. No adjusting or correcting entries were made although Pitchfork has fulfilled their obligation to perform consulting services as stipulated in the contract. Pitchfork did not realize the error until after the 2018 Income from Continuing Operations was calculated at $1,400,000.

a. Determine the adjustment for Service Revenue affecting ICO for 2018: $___?_____

b. Determine the effect of this error on Retained Earnings (if any): $______?________

Continuing with the information presented in #1 above, Pitchfork has ICO of $1,400,000 and a corporate tax rate of 30%. Determine if ICO should be adjusted based on the following information:

3) Pitchfork purchased a computer system for $260,000 on January 1, 2015 with an estimated 8 year useful life and $20,000 salvage value. Pitchfork uses the straight-line method to depreciate this class of asset. Near the end of 2018, the company determined it was appropriate to change the depreciation method of this asset to the Double-Declining-Balance method and wanted to apply the DDB method for 2018. The bookkeeper was unaware of this change and already calculated 2018 ICO using the straight-line method.

Adjustment (if any) for Depreciation Expense (2018): $_____?__________________