The Hannam Company decided to change from the declining- balance method of depreciation to the straight- line method effective 1 January 20X7. The following information was provided:

The company has a 31 December year- end. The tax rate is 22%. No dividends were declared until 20X7; $ 40,000 of dividends were declared and paid in December 20X7. Income for 20X7, calculated using the new accounting policy, was $ 210,000. Required: Assuming that the change in policy was implemented retrospectively, present the retained earnings reconciliation that would appear in Hannam's 20X7 statement of changes inequity.

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Excess of Declining-balance Depreciation over Net Income Year as Reported Straight-Line Depreciation 20X3" $60,000) 20X4 70,000 20X5 45,000 20X6 105,000 $10,000 30,000 25,000 14,000