Refer to Exhibit 22-3

question 81

Multiple Choice

Refer to Exhibit 22-3. If the revised estimated useful life of the truck is a total of seven years, and assuming an income tax rate of 35%, what is the amount of the prior-years effect that Katrina should report in its 2017 income statement as a result of changing the useful life of the truck?

• A) $0
• B) $5,600
• C) $16,800
• D) $58,800

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Definitions:

Adjusted R-Square

A statistical measure that adjusts the R-square value for the number of predictors in the model, providing a more accurate representation of the data's explanatory power.

Real Estate

The market sector involving the buying, selling, and leasing of land, buildings, and property.

House Size

The measurement of a living space in a home, often quantified in square feet or meters, indicating the available living area.

Residual

The discrepancy between actual observations and the values forecasted by a theoretical model.