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What the cumulative effect of this accounting change

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Problem 1: On January 1, 2002, Meyer Corporation acquired machinery at a cost of P800,000. Meyer adopted the double-declining-balance method of depreciation for this equipment and had been recording depreciation over an estimated life of eight years, with no residual value. At the beginning of 2005, a decision was made to change to the straight-line method of depreciation for this equipment. Assuming a 30% tax rate, the cumulative effect of this accounting change, net of tax, is

a. P162,500.
b. P113,750.
c. P105,000.
d. P102,812.

Reference no: EM132690293

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