Multiple Choice
On January 1, 2006, Lynn Corporation acquired equipment at a cost of $600,000. Lynn 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 2009, 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 on beginning retained earnings, net of tax, is
A) $121,875.
B) $0.
C) $78,750.
D) $77,109.
Correct Answer:

Verified
Correct Answer:
Verified
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