Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

IMPORTANT: your first post to this forum must be your message to the President. If it is not, you will earn a zero for this

image text in transcribed

IMPORTANT: your first post to this forum must be your message to the President. If it is not, you will earn a zero for this discussion forum. Assume you are the accountant for a small business. Consider the following situation. On January 2, 2018, the business purchased a large piece of equipment for $425,000. At that time, you used straight line depreciation, with no salvage value to depreciate the equipment over 7 years. It is now January 2, 2021, you have already recorded depreciation for 2020. You realize that the estimate of useful life that you are using to calculate depreciation is inaccurate. You now estimate that the equipment will only be useful for 5 years from the date of acquisition. You are to write a message to the President, Jessica Ross, describing how this change will affect the 2021 financial statements, both the income statement and balance sheet. Give a high level overview on how you calculated the new depreciation expense and accumulated depreciation. Also, discuss how this change will affect prior years' financial statements. Remember your audience. Your message must be concise and completely free of spelling and grammatical errors. Refer to the textbook and Chapter 10 PowerPoint slide deck for the topic Change in Estimates for Depreciation

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

IT And European Bank Performance

Authors: E. Beccalli

1st Edition

0230006949, 9780230006942

More Books

Students also viewed these Accounting questions