Question
After depreciating office equipment for three years based on an expected useful life of eight years, the company decided this year that the office equipment
After depreciating office equipment for three years based on an expected useful life of eight years, the company decided this year that the office equipment should last seven more years. As a result, the depreciation for the current year is $8,000 instead of $10,000. Identify where the following adjustment should appear in the financial statements:
A.This change from an unexpected useful life of 8 years to 10 years is a change in an accounting estimate. The $8,000 should be reported in the income statement as part of profit from continuing operations.
B.This change from an unexpected useful life of 8 years to 10 years is not a change in an accounting estimate. The $10,000 needs to be reported in the income statement as part of profit from continuing operations.
C.This change from an unexpected useful life of 8 years to 10 years is a change in an accounting estimate. However, the $10,000 should be reported in the income statement as part of profit from continuing operations.
D. None of the above .
which is answer?
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