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Company: Pfizer Inc. Data for the year ended December 31, 2023: Item Amount Property, Plant, and Equipment (PPE) Cost $60,000,000 Accumulated Depreciation $24,000,000 Estimated

Company: Pfizer Inc.
 Data for the year ended December 31, 2023:

Item

Amount

Property, Plant, and Equipment (PPE) Cost

$60,000,000

Accumulated Depreciation

$24,000,000

Estimated Salvage Value

$6,000,000

Remaining Useful Life

8 years

Annual Depreciation Expense

$4,500,000

  1. Calculate the book value of PPE.
  2. Determine the new depreciation expense if the estimated useful life is reduced to 6 years.
  3. Discuss the financial statement impact of this change in estimate.
  4. Explain why the Conservatism Principle is important in depreciation.
  5. How should Pfizer record the change in depreciation expense?
  6. Evaluate the importance of the Materiality Principle in determining depreciation policies.

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