In 2012, Management of Simolin Company Changed from Straight-Line to Double-Declining

question 63

Essay

In 2012, management of Simolin Company changed from straight-line to double-declining balance depreciation. The total difference in depreciation for all years through 2012 was $54,000 and for 2013 the difference was $6,200. The tax rate is 30%. Calculate the amount by which retained earnings at the start of 2013 should be adjusted.

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Definitions:

External Cause

A factor or event that originates outside of an individual and has an impact on personal outcomes or behaviors.

Fundamental Attribution Error

A cognitive bias where individuals attribute others' actions to their character or personality, rather than external factors.

Self-Effacing Error

The tendency to attribute one’s successes to external factors while blaming oneself for failures, commonly observed in certain cultures.

Signal Detection Error

occurs when an observer incorrectly perceives or fails to perceive a stimulus, leading to false positives or negatives in the detection task.