On January 1, Year 7, Colorado Corp purchased a machine having an estimated useful life of 8 years and no salvage value The machine was depreciated by the double declining balance (DDB) method for both financial statement and income tax reporting On January 1, Year 9, Colorado justifiably changed to the straight line method for both financial statement and income tax reporting Accumulated depreciation at December 31, Year 8, was $525,000 If the straight line method had been used, the accumulated depreciation at December 31, Year 8, would have been $300,000 The retroactive adjustment to the accumulated depreciation account on January 1, Year 9, as a result of the change in depreciation method is A $0 B $225,000 C $525,000 D $300,000

Question

On January 1, Year 7, Colorado Corp  purchased a machine having an estimated useful life of 8 years and no salvage value  The machine was depreciated by the double declining balance (DDB) method for both financial statement and income tax reporting  On January 1, Year 9, Colorado justifiably changed to the straight line method for both financial statement and income tax reporting  Accumulated depreciation at December 31, Year 8, was $525,000  If the straight line method had been used, the accumulated depreciation at December 31, Year 8, would have been $300,000  The retroactive adjustment to the accumulated depreciation account on January 1, Year 9, as a result of the change in depreciation method is A  $0 B  $225,000 C  $525,000 D  $300,000

Accepted Answer

The Answer is in the image, click to view ...

On January 1, Year 7, Colorado Corp. purchased a machine having an estimated useful life of 8 years and no salvage value. The machine was depreciated by the double-declining-balance (DDB) method for both financial statement and income tax reporting. On January 1, Year 9, Colorado justifiably changed to the straight-line method for both financial statement and income tax reporting. Accumulated depreciation at December 31, Year 8, was $525,000. If the straight-line method had been used, the accumulated depreciation at December 31, Year 8, would have been $300,000. The retroactive adjustment to the accumulated depreciation account on January 1, Year 9, as a result of the change in depreciation method is

A.	$0
B.	$225,000
C.	$525,000
D.	$300,000

Question

On January 1, Year 7, Colorado Corp. purchased a machine having an estimated useful life of 8 years and no salvage value. The machine was

Step by Step Solution

Step: 1

Get Instant Access to Expert-Tailored Solutions

Step: 2

Step: 3

Ace Your Homework with AI

Students also viewed these Accounting questions

Question

Question

Question

Question

Question

Question

Question

Question

Question