SIMULATION 7 Chapter 22 Pryor Company's net income for the past three years are presented below: 2013 2012 2011 $240,000 $225,000 $180,000 After the 2013 reported year-end, the following items come to your attention Pryor bought a truck January 1, 2010 for $98,000 with an $8,000 estimated salvage value and a six- year life. The company debited an expense account and credited cash on the purchase date for the entire cost of the asset. (Straight-line depreciation should have been used.) Pryor purchased a cement plant on January 1, 2011 for $180,000-estimated useful life, 10 years, no salvage value and straight-line depreciation was used. At the beginning of 2013, Pryor changed from straight-line to the double-declining balance depreciation method. Original useful live and salvage estimates remain unchanged The net income for 2013 was computed on the double-declining balance method for the cement plant and did not reflect any depreciation related to the truck expensed in 2010