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On January 1, 2022, Pharoah Corporation acquired machinery for $1640000. Pharoah adopted the straight-line method...

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Accounting

On January 1, 2022, Pharoah Corporation acquired machinery for $1640000. Pharoah adopted the straight-line method of depreciation for this machine and had been recording depreciation over an estimated life of ten years, with no residual value. At the beginning of 2025, a decision was made to change to the double-declining balance method of depreciation for this machine. Assuming a 20% tax rate, the cumulative effect of this accounting change on beginning retained earnings, is
A.$0
B.$308320
C. $246656
D. $183680.
image
On January 1, 2022, Pharoah Corporation acquired machinery for $1640000, Pharoah adopted the straight-line method of depreciation for this machine and had been recording depreciation over an estimated life of ten years, with no residual value. At the beginning of 2025, a decision was made to change to the double-declining balance method of depreciation for this machine. Assuming a 20% tax rate, the cumulative effect of this accounting change on beginning retained earnings, is $308320 $246656. $183680

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