Question
On March 1, 2015, Copy Line paid $102,000 for a new copy machine. It was estimated that the machine would produce 850,000 copies over the
On March 1, 2015, Copy Line paid $102,000 for a new copy machine. It was estimated that the machine would produce 850,000 copies over the next 5 years, at which time it could be sold for $17,000. The copy machine made the following amount of copies during its life:
2015 110,000 copies
2016 168,000 copies
2017 154,000 copies
2018 143,000 copies
2019 87,500 copies
It was sold on June 1, 2019 for $18,500.
Assume that Copy Line uses the Straight Line method of depreciation. What would the effect be on its 2016 Balance Sheet if Copy Line neglects to use salvage value in its depreciation calculation:
A. | Assets Liabilities SHE No effect No effect No effect | |
B. | Assets Liabilities SHE Understated No effect Understated | |
C. | Assets Liabilities SHE Overstated Understated Overstated | |
D. | Assets Liabilities SHE Understated Understated No effect | |
E. | Assets Liabilities SHE Overstated Overstated Understated |
Please select the correct letter choice.
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