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Exam Code: SAP C_S4CMA_2108
Exam Name: SAP Certified Application Associate - SAP S/4HANA Cloud (public) - Manufacturing Implementation
Certification: SAP Certified Application Associate
Total Questions: 104 Q&As
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NEW QUESTION: 1
Vince Inc. changed from the double-declining balance to the straight-line method of depreciation during 20x3. Total depreciation expense for previous years under the double-declining balance method totaled $29,000. Vince Inc. calculated that if the straight-line method had been used, depreciation would have totaled $17,000. Vince Inc. is taxed at a rate of 34 percent. What is the cumulative effect of the accounting change that should be reported on Vince's income statement for the year ended 20x3?
A. $7,920
B. $12,000
C. ($12,000)
Answer: A
Explanation:
If the new accounting method (straight-line) had been used in previous years, Vince's total depreciation expense would have been $12,000 lower ($29,000 - $17,000), and income before income taxes would have been $12,000 higher. Therefore, the cumulative effect of accounting change that should be reported on Vince's income statement for the year ended 20x3 is a positive $7 920 [$12 000x(1-0 34)]
$ 7,920 [$12,000 x (1 0.34)].


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