Larry Corp. purchased a capital asset for $$158,000$ in early $20$X$3.$ Management estimated that the asset would have a $10-$year life with an estimated residual value of $$23,500$ and would be depreciated on a straight$-$line basis with a full year$$s depreciation in the year of purchase. In $20$X$5,$ management decides to change the depreciation method to $10\%$ declining balance. This is a change in policy because the change is motivated by a desire to conform to industry practice. The tax rate is $30\%.$

Required:

$1.$ Calculate depreciation expense for $20$X$320$X$5,$ inclusive, using the old policy and then the new policy.

$2.$ Calculate the effect of the change on opening $20$X$5,20$X$4,$ and $20$X$3$ retained earnings, if any.