Requirement a. Assuming a tax rate of 40%, prepare the multiple-step income statement for Rocket Man for the year ended December 31,2022. Rocket Man, Inc. Income Statement For the Year Ended December 31, 2022 Sales Cost of Goods Sold Gross Profit Selling and Administrative Expenses Operating Income Other Revenues/Gains: Gain on Restructuring (pretax) Gain on Sale of Investments (pretax) Next Requirement b. Compute the cumulative effect of the accounting changes made in 2022. changes are accounted for on a retrospective basis and there is no cumulative effect needed. The error correction is a prior period adjustment and would be applied prospectively. accounted for on a prospective basis and there is no cumulative effect needed. The error correction is a prior period adjustment and would be applied retrospectively. equirement c. Prepare the journal entries to record the accounting changes made in 2022. (Record debits first, then credits. Exclude explanations from any journal entries.) irst, prepare the journal entry to reflect the new depreciation method. Prepare the journal entry to reflect the error correction. Requirement d. Prepare the footnote disclosures required for the accounting changes made in 2022. Begin with the footnote for the change in depreciation method. (Round your answers to the nearest whole dollar.) Management determined that the method better reflects the income flows generated from the use of its major plant assets. Therefore, the Company changed its method of depreciating its plant assets from the I to the method effective Januarv 1. 2022. The estimated useful life and of its major plant assets. Therefore, the Company changed its method of depreciating its plant assets from the to the method effective January 1, 2022. The estimated useful life and residual value have not been revised. The effect of this change in estimate is in depreciation expense from to for the current year. Income from continuing operations and net income by as a result of the change in estimate for the year ended December 31. The accounting change is reported Prepare the footnote for the change in bad debt estimates. Due to declining economic conditions, the Company has determined that it has not provided sufficient amounts to cover its uncollectible amounts. As a result, effective January 1, 2022, management its estimated bad debt expense from % to % of accounts receivable. The effect of this change in estimate is in bad debt expense from to for the current year. Income from continuing operations after tax by as a result of the change in estimate for the year ended December 31, 2022. The accounting change in estimate is renorted Rocket Man, Incorporated provided the following financial statement information for 2022 : Prepare the footnote for the error correction. Management failed to accrue [ Management faled to accrue of in the current year. rent expense in 2017. The effect of this change is of There is on net income of There is on net income in the current year. Rocket Man, Inc. Statement of Stockholders' Equity (Partial) For the Year Ended December 31, 2022 \begin{tabular}{l} \hline \\ Net Income \\ Less: Dividends Declared \\ Retained Earnings, December 31, 2022 \end{tabular} Data table Requirements a. Assuming a tax rate of 40%, prepare the multiple-step income statement for Rocket Man for the year ended December 31, 2022. b. Compute the cumulative effect of the accounting changes made in 2022. c. Prepare the journal entries to record the accounting changes made in 2022. d. Prepare the footnote disclosures required for the accounting changes made in 2022. e. Prepare the retained earnings column of the statement of stockholders' equity for the year ended December 31, 2022. More info - On January 1, 2022, Rocket Man changed its plant and equipment accounting for depreciation from the double-declining balance method to the straight-line method. Rocket Man purchased the assets on January 1, 2021 for $600,000; they had no scrap value and useful lives of 10 years. The balance in the accumulated depreciation account on January 1,2022 amounted to $120,000. Rocket Man recorded the straight-line depreciation expense of $53,333 in 2022 and included it in the $480,000 reported for selling and administrative expenses. Depreciation expense would have been $96,000 if Rocket Man still used the double-declining balance method. - Bad debt expense for 2022 of $50,000 is included in selling, general, and administrative expenses on the income statement. Rocket Man uses the percentage of accounts receivable method of estimating bad debt expense. The estimated percentage was 5% in both 2020 and 2021 but changed to 10% in 2022. At December 31, 2022, the Accounts Receivable balance is $600,000, and the Allowance for Uncollectible Accounts (before adjustment) was $10,000 credit balance