Question
Behrend Corp. purchases a delivery truck on 1/01/2012. Its full acquisition cost is $50,000. Behrend estimates that the truck will have a 5-year service life
Behrend Corp. purchases a delivery truck on 1/01/2012. Its full acquisition cost is $50,000. Behrend estimates that the truck will have a 5-year service life and a residual value of $10,000.
Assume that Behrend uses straight-line depreciation and that during 2014, management changes its estimate of total service life from 5 to 8 years and revises the estimate of residual value from $10,000 to $4,000. Depreciation expense recognized in 2014 is:
$8,000. |
$4,000. |
$5,000. |
A U.S. corporation includes machinery on its 12/31/2014 balance sheet at its book value of $1,000,000 (cost of $1,500,000, and accumulated depreciation of $500,000). This indicates:
| none of the above
|
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