On January 2, 2018, Tobias Company Began Using Straight-Line Depreciation

question 135

Multiple Choice

On January 2, 2018, Tobias Company began using straight-line depreciation for a certain class of assets. In the past, the company had used double-declining-balance depreciation for these assets. As of January 2, 2018, the amount of the change in accumulated depreciation is $40,000. The appropriate tax rate is 40%. The separately reported change in 2018 earnings is:

• A) An increase of $40,000.
• B) A decrease of $40,000.
• C) An increase of $24,000.
• D) None of these answer choices are correct.

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Definitions:

Stand-Alone Locations

Business sites that are physically separate and distinct from other buildings or businesses, often offering advantages like visibility and accessibility.

Wholesale Club

A retail store that sells a wide range of merchandise in bulk and at discounted rates, usually to members only.

Stand-Alone Locations

Specific sites chosen for businesses that operate independently of other firms, often sought after for their visibility and accessibility to customers.

Service Businesses

Companies that primarily sell intangible goods or services rather than physical objects, such as consultancy, repair, and maintenance firms.