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:

a-the machinery is worth $1,000,000 at the balance sheet date

b-$500,000 of depreciation expense was recognized in 2014

c-the undepreciated cost of the machinery is $1,000,000 at the balance sheet date

d-all of the above are correct

none of the above