Revision of estimated service life changes depreciation schedule. Fast Pace Shipping Company buys a new machine for
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Revision of estimated service life changes depreciation schedule. Fast Pace Shipping Company buys a new machine for $\$ 40,000$ on January 1, Year 7. It estimates that the machine will last 10 years and have a salvage value of $\$ 4,000$. Early in Year 9 , it discovers that the machine will last only an additional six years, or eight years total (with no change in estimated salvage value). The company closes its books on December 31. Present a table showing the depreciation charges for each year from Year 7 to Year 10 , using each of the following methods:
a. The straight-line method
b. The sum-of-the-years'-digits method
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Financial Accounting An Introduction To Concepts Methods And Uses
ISBN: 9780324183511
10th Edition
Authors: Clyde P. Stickney, Roman L. Weil
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