Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sheridan Company purchased a machine on January 1, 2019, for $837000. At the date of acquisition, the machine had an estimated useful life of 6

image text in transcribed

Sheridan Company purchased a machine on January 1, 2019, for $837000. At the date of acquisition, the machine had an estimated useful life of 6 years with no salvage. The machine is being depreciated on a straight-line basis. On January 1, 2022, Sheridan determined, as a result of additional information, that the machine had an estimated useful life of 8 years from the date of acquisition with no salvage. An accounting change was made in 2022 to reflect this additional information. Assume that the direct effects of this change are limited to the effect on depreciation and the related tax provision, and that the income tax rate was 30% in 2019, 2020, 2021, and 2022. What should be reported in Sheridan's income statement for the year ended December 31, 2022, as the cumulative effect on prior years of changing the estimated useful life of the machine? O $83700 O $418500 O $0 O $55800

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

Accounting Essentials For Hospitality Managers

Authors: Chris Guilding, Kate Mingjie Ji

4th Edition

1032024321, 9781032024325

More Books

Students also viewed these Accounting questions