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.

---

Definitions:

Subject Matter

The specific topic, content, or area of focus of a discussion, study, or document.

Impossibility of Fact

A situation where the completion of a contractual duty or obligation cannot occur due to unforeseen and unavoidable factual circumstances.

Hardship Rule

A legal principle allowing for the modification or termination of a contract when unforeseen hardships render its performance impractical or excessively burdensome.

Counteroffer

A proposal made in response to an initial offer, which effectively rejects the original offer and proposes new terms for agreement.