Question: Bailey Corp. changed depreciation methods in 2011 from straight-line to double-declining-balance because management argued that the change would improve the relevance of the information to

Bailey Corp. changed depreciation methods in 2011 from straight-line to double-declining-balance because management argued that the change would improve the relevance of the information to financial statement readers. The assets involved were acquired early in 2008 for $185,000 and had an estimated useful life of eight years, with no residual value. The 2011 income using the double-declining-balance method was $490,000. Bailey had 10,000 common shares outstanding all year. What is the effect of the accounting change on the reported income and EPS for 2011? Bailey follows IFRS. Ignore income taxes.

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