A company placed an asset into service on january 1 2008

Reference no: EM13603010

A company placed an asset into service on January 1, 2008. Its cost was $1,350,000 with an estimated service life of 6 years. Salvage value was estimated to be $90,000. Using the double-declining-balance method of depreciation, the depreciation for 2008, 2009, and 2010 was $450,000, $300,000, and $200,000, respectively. During 2010, however, the company's management decided to change to the straight-line method of depreciation.

Assume that the company reports only the 2010 results in its financial statements (earliest year presented) and the company is taxed at a 35% tax rate. What amount will be reported as an adjustment to the beginning balance of retained earnings to reflect the change in accounting principle?

Reference no: EM13603010

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