For a Company Using the Straight-Line Method of Depreciation That

question 9

Multiple Choice

For a company using the straight-line method of depreciation that changes the estimated useful life from 20 years to 15 years as at the beginning of the year, the accountant should do (or not do) the following:

• A)Compute current year depreciation as (carrying amount - residual value)divided by 20 years.
• B)Adjust prior year's depreciation.
• C)Do not adjust the amount of accumulated depreciation as at the beginning of the year.
• D)Compute current year depreciation as (carrying amount)× 15/20.

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Definitions:

Marginal Social Cost

The total cost society bears for the production of an additional unit of a good or service, including both external and private costs.

Coal Mine Pollution

Environmental contamination resulting from the operation of coal mines, including air and water pollution.

Marginal Social Cost

The total cost society bears for the production of an additional unit of a good, including both private costs and any external costs.

Production Process

A series of steps that involves the transformation of raw materials into finished products.