Quayle Company acquired machinery on January 1, 2005 which it depreciated under the straight-line method with an estimated life of fifteen years and no salvage value. On January 1, 2010, Quayle estimated that the remaining useful life of this machinery was six years with no salvage value. How should this change be accounted for by Quayle? As a prior period adjustment O As the cumulative effect of a change in accounting principle in 2010. O By setting future annual depreciation equal to one-sixth of the book value on January 1, 2010 O By continuing to depreciate the machinery over the original fifteen year life.
Quayle Company acquired machinery on January 1, 2005 which it depreciated under the straight-line method with an estimated life of fifteen years and no salvage value. On January 1, 2010, Quayle estimated that the remaining useful life of this machinery was six years with no salvage value. How should this change be accounted for by Quayle? As a prior period adjustment O As the cumulative effect of a change in accounting principle in 2010. O By setting future annual depreciation equal to one-sixth of the book value on January 1, 2010 O By continuing to depreciate the machinery over the original fifteen year life.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 5MC: During 2019, White Company determined that machinery previously depreciated over a 7-year life had a...
Related questions
Question
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
Unlock instant AI solutions
Tap the button
to generate a solution
Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT