1. On January 1, 2005, Wintz Corporation acquired machinery at a cost of $600,000. Wintz 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 2008, a decision was made to change to the double-declining balance method of depreciation for this machine.
a. Assuming a 30% tax rate, what is the cumulative effect of this accounting change on beginning retained earnings?
b. What amount should Wintz record as depreciation expense for 2008?