Estimate and Error Financial Statement Change

Change in Estimate and Error; Financial Statements)Presented below are the comparative statements for Titan Company.
2013 2014
Sales $640,000 $890,000
Cost of sales 480,000 565,000
Gross profit 160,000 325,000
Expenses 60,000 106,000
Net income $100,000 $219,000
Retained earnings (Jan. 1) $680,000 $740,000
Net income 100,000 219,000
Dividends (40,000) (85,000)
Retained earnings (Dec. 31) $740,000 $874,000
The is provided:
1.In 2014, Titan decided to switch its depreciation method from the to thedouble-declining-balance method. The assets were purchased at the beginning of 2013 for $200,000with an of 5 years and no salvage value. (The 2014 income statement contains depreciation expense of $40,000.)
2.In 2014, the company discovered that the ending inventory for 2013 was understated by $33,000;ending inventory for 2014 is correctly stated.
Prepare the revised income and for 2013 and 2014, assuming comparativestatements.

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