Asked by Grant Burry on Apr 29, 2024
Verified
Refer to Exhibit 23-2.Accordingly, the appropriate accounting change was made in 2014.How much depreciation expense for this machine should Michelle record for the year ended December 31, 2014?
A) $4, 800
B) $4, 000
C) $2, 400
D) $ 0
Depreciation Expense
The portion of the cost of a fixed asset that is considered consumed in each period of the asset's useful life.
- Investigate the repercussions of modifications in accounting estimates on the presentation of financial information.
Verified Answer
ZK
Zybrea KnightMay 05, 2024
Final Answer :
B
Explanation :
The original depreciation per year was $48,000 / 8 = $6,000. After 4 years (2010-2013), total depreciation would be $6,000 * 4 = $24,000. The remaining book value at the start of 2014 is $48,000 - $24,000 = $24,000. With the revised useful life to 10 years total, and 4 years already passed, there are 6 years remaining. Thus, the new annual depreciation is $24,000 / 6 = $4,000.
Learning Objectives
- Investigate the repercussions of modifications in accounting estimates on the presentation of financial information.
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