Question 5: (13 marks) Reported below are the comparative income statements for McElroy Company for the years 2019 and 2020. 2020 2019 Retained camnings (1) S130,000 72.000 Net income 51.000.000 Dividends 30,000 20.000) Retained carings (Dec 3175152.0005130,000 The following additional information is provided. McElroy Company, acquired the following assets in January 2017 Tquipment, 7-year estimated weful life to residula S150,000 cost The equipment has been depreciated using the sum-of- the-years-digits method for the first 3 years for financial reporting purposes. In 2020, the company decided to change the method of computing depreciation to the straight-line method for the equipment. McElroy also decided to change the total useful life of the equipment from 6 years to 4 years, but no change was made in the residual value. (The 2020 income statement contains depreciation expense of $27,000 on the assets purchased at the beginning of 2014.) In 2020, McElroy Company discovered that the ending inventory for 2019 was overstated by $30,000; ending inventory for 2020 is correctly stated. Required Compute depreciation expense for 2020. (3 marks) Prepare the journal entry to record depreciation expense for the equipment in 2020. (4 marks) Prepare the revised retained earnings statement for 2019 and 2020, assuming comparative statements. (6 marks)