On January 2, 2009, Tobias Company Began Using Straight-Line Depreciation

question 84

Multiple Choice

On January 2, 2009, 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, 2009, the amount of the change in accumulated depreciation is $40,000. The appropriate tax rate is 40%. The separately reported change in 2009 earnings is:

• A)An increase of $40,000.
• B)A decrease of $40,000.
• C)An increase of $24,000.
• D)None of these Cumulative adjustments are no longer the appropriate way to handle changes in accounting principles.

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