Exhibit 22-1 On January 1, 2016, the Chrissy Company purchased a machine for $450,000 with an estimate useful life of six years and a $30,000 salvage value. Straight-line depreciation was used for financial reporting purposes and MACRS depreciation for income tax reporting. Effective January 1, 2018, Chrissy switched to the double-declining-balance depreciation method for financial statement
reporting but not for income tax purposes. Chrissy can justify the change. ? Refer to Exhibit 22-1. Assuming an income tax rate of 35%, what is the amount of cumulative effect change reported in Chrissy's 2018 income statement ?
A) $0
B) $77,000
C) $93,333
D) $110,000
A
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