Trainer Ltd Is Trying to Decide Whether to Change from the Reducing

question 35

Multiple Choice

Trainer Ltd is trying to decide whether to change from the reducing balance method of depreciation to the straight-line method for both accounting and tax purposes.Using the reducing balance method at the rate allowable for taxation purposes,the expense would be $1 020 000.If it changed to the straight-line method,depreciation expense would be $680 000.If the straight-line method were used instead of the reducing balance method,
-what would be the effect on net book value of assets?

• A) $340 000 reduction
• B) $340 000 increase
• C) $217 600 reduction
• D) $217 600 increase

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Definitions:

Social Norms

Informal rules that govern behavior in groups and societies, shaping individuals' actions and interactions.

Peer Influences

The impact that peers or individuals of similar age or status have on each other, affecting behaviors, attitudes, and values.

Reflective Judgment

In Kitchener’s theory of the development of problem solving, the analysis of the elements of a problem and justification of problem solutions.

Environmental Pressures

Forces from the surrounding environment that influence the behavior, decisions, or wellbeing of an individual or organization.