P21-11 It is December 2017 and Wagner Inc

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P21-11 It is December 2017 and Wagner Inc. recently hired a new accountant, Jodie Larson. Although Wagner is a private company, it follows IFRS. As part of her preparation of the 2017 financial statements for Wagner Inc., Jodie has proposed the following accounting changes. 1.At December 31, 2016, Wagner had a receivable of $250,000 from Michael Inc. on its statement of financial position that had been outstanding since mid-2015. In December 2017, Michael Inc. was declared bankrupt and no recovery is expected. Jodie proposes to write off the receivable in 2017 against retained earnings as a correction of a 2015 error. 2. Jodie proposes to change from double-declining-balance to straight- line depreciation for the company's manufacturing assets because of a change in the pattern in which the assets provide benefits to the company. If straight-line depreciation had been used for all prior periods, retained earnings would have been $380,800 higher at December 31, 2016. The change's effect just on 2017 income is a reduction of $48,800. 3. For equipment in the leasing division, Jodie proposes to adopt the sum-of-the-years'-digits depreciation method, which the company has never used before. Wagner began operating its leasing division in 2017. If straight-line depreciation were to be used, 2017 income would be $110,000 higher.