Moncton Developments Ltd. decided to change from the declining-balance method of depreciation to the straight-line method effective 1 January 2019. This change will be implemented retrospectively. The following information was provided:

Year Net Income as Reported Excess of Declining-Balance Depreciation over straight-Line Depreciation

2015* $ (58,200) $ 4,200

2016 57,400 12,600

2017 36,400 11,500

2018 85,000 5,900 ________________________________________

*First year of operations. The company has a Dec 31st year-end. The tax rate is 20%. No dividends were declared until 2019 $39,200 of dividends were declared and paid in Dec 2019. Income for 2019, calculated using the new accounting policy, was $412,800 after income tax.

Required:

a) Calculate the earnings correction that Moncton Developments Ltd.. must show in the 2019 financial statements.

b) Prepare the 2019 entry to record the change in accounting policy. General Journal Date Account Titles and Explanation Debit Credit

c) Present the retained earnings reconciliation that would appear on Moncton Developments statement of changes in equity.