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Stacey Corp has been depreciating equipment over a 10-year life on a straight-line basts. The equipment, which cost $26,100, was purchased on 1 January 20X1
Stacey Corp has been depreciating equipment over a 10-year life on a straight-line basts. The equipment, which cost $26,100, was purchased on 1 January 20X1 . It has an estimated residual value of $6.700. On the basis of experience since acquisition, management has decided in 20x5 to depreciate it over a total life of 14 years instead of 10 years, with no change in the estimated residual value The change is to be effective on 1 January 20X5. The 20x5 financial statements are prepared on a comparative basis, 20x4 and 20x5 incomes before depreciation were $51.400 and $54,300, respectively. Disregard income tax considerations. Required: 1-a Analyze the effects of the change (Leave no cells blank - be certain to enter "o" wherever required. Amounts to be deducted should be indicated by a minus sign.) 20x1 Analysis Cost Accumulated depreciation to date Residual value To be depreciated Annual depreciation (SL) Per year
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