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On January 1, 2005, 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 2008, a decision was made to change to the straight-line method of depreciation for this equipment. Assuming a 30% tax rate, what the cumulative effect of this accounting change on beginning retained earnings, net of tax, is ?

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Accounting Basics, Accounting

Category:- Accounting Basics
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