Choose the correct answer

Use the following information for questions 21.

Swift Company purchased a machine on January 1, 2012, for $600,000. At the date of acquisition, the machine had an estimated useful life of six years with no salvage. The machine is being depreciated on a straight-line basis. On January 1, 2015, Swift determined, as a result of additional information, that the machine had an estimated useful life of eight years from the date of acquisition with no salvage. An accounting change was made in 2015 to reflect this additional information.

21. What is the amount of depreciation expense on this machine that should be charged in Swift's income statement for the year ended December 31, 2015?

a. $ 60,000

b. $ 75,000

c. $120,000

d. $150,000

22. Which of the following describes a change in reporting entity?

a. A company acquires a subsidiary that is to be accounted for as a purchase.

b. A manufacturing company expands its market from regional to nationwide.

c. A company divests itself of a European branch sales office.

d. Changing the companies included in combined financial statements.

23. Equipment was purchased at the beginning of 2012 for $680,000. At the time of its purchase, the equipment was estimated to have a useful life of six years and a salvage value of $80,000. The equipment was depreciated using the straight-line method of depreciation through 2014. At the beginning of 2015, the estimate of useful life was revised to a total life of eight years and the expected salvage value was changed to $50,000. The amount to be recorded for depreciation for 2015, reflecting these changes in estimates, is

a. $41,250.

b. $66,000.

c. $76,000.

d. $78,750.