Question
Fobic inc. acquired some manufacturing fracturing equipment in January 2019 for $400,000 and depreciated 540,000 each year for three years on a straight-line basis. During
Fobic inc. acquired some manufacturing fracturing equipment in January 2019 for $400,000 and depreciated 540,000 each year for three years on a straight-line basis. During 2022, the manufacturer announced a new technology for this type of equipment that will make the old models absolute by the end of 2025. as a result, fobic will plan to replace the equipment at that time, effectively reducing the asset's life from ten to seven years. in its financial statements for 2022, fobic should:
A. Charge $280,000 in depreciation expenses,
B. Report the book value of the equipment in is December 31, 2022 balance sheet at $219,000.
C. Make an adjustment to retained earnings for the error in measuring depredation during 2018.2021.
D. None of these answer choices are correct
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