Question
On April 1, 2014, Sparky purchased a truck for $50,000 with a salvage value of $7,000 and useful life of 5 years which was depreciated
On April 1, 2014, Sparky purchased a truck for $50,000 with a salvage value of $7,000 and useful life of 5 years which was depreciated using the straight line method. On October 1, 2016, Sparky decided to change the salvage to $3,630 and a total useful life of 9 years. The bookkeeper has not recorded any depreciation on the truck for 2016.
Determine the ADJUSTMENT to Sparkys Income from Continuing Operations (ICO) for this item.Sparky has a corporate tax rate of 30%.
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Fundamental Managerial Accounting Concepts
Authors: Thomas Edmonds
6th Edition
78110890, 978-0078110894
