Question
UIUC Inc. initially purchased a machine for $160,000 on January 1, 2018. The machine was estimated to have a useful life of 8 years
UIUC Inc. initially purchased a machine for $160,000 on January 1, 2018. The machine was estimated to have a useful life of 8 years and zero salvage value. On January 1, 2022, UIUC determined that the machine only had 2 years of remaining useful life and a salvage value of $5,000. What is the new annual depreciation expense for the machine, and how will UIUC account for the change in estimate? Assume UIUC uses straight-line depreciation for all its fixed assets. O Prospectively: $37.500 Retrospectively: $20,000 O Prospectively: $40,000 O Prospectively: $19,375
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