Refer to Exhibit 23-1.Assuming an income tax rate of 30%, the cumulative effect change reported in Carol's 2012 income statement would be

A) $ 0
B) $ 77, 000
C) $ 93, 333
D) $110, 000

Question

Refer to Exhibit 23-1.Assuming an income tax rate of 30%, the cumulative effect change reported in Carol's 2012 income statement would beA) $ 0B) $ 77, 000C) $ 93, 333D) $110, 000

Komal mehboob · Accepted Answer

Final Answer : A, Explanation :  The cumulative effect of a change in depreciation method is accounted for prospectively, not retrospectively. Therefore, there is no cumulative effect to be reported in the income statement for the year the change is made.

Refer to Exhibit 23-1.Assuming an income tax rate of 30%, the cumulative effect change reported in Carol's 2012 income statement would be

A) $ 0
B) $ 77, 000
C) $ 93, 333
D) $110, 000

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