Question
A machine was depreciated for 30 of 50 years when it was discovered that the estimated life of 50 years was usederroneously. That 50-year life
A machine was depreciated for 30 of 50 years when it was discovered that the estimated life of 50 years was usederroneously. That 50-year life was for buildings; the estimated life of all machines was 40 years. The item qualifies as a prior period adjustment. Indicate the appropriate accounting:
Select one:
a.Continue to depreciate the machine over the original 50-year life
b.Depreciate the remaining book value over the remaining life of the asset
c.Adjust accumulated depreciation to its appropriate balance, through net income, based on a 40-year life, and then depreciate the adjusted book value as though the estimated life has always been 40 years
d.Adjust accumulated depreciation to its appropriate balance through retained earnings, based on a 40-year life, and then depreciate the adjusted book value as though the estimated life has always been 40 years
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