Squid Roe,Inc

question 72

Multiple Choice

Squid Roe,Inc.'s $48,000 sushi bar was originally expected to be used for eight years with no residual value.Depreciation on the bar was $6,000 per year for the past two years.In the third year,management changed the estimated life of the bar to be a total of only six years instead of eight.What should Squid Roe do?

• A)Go back and revise all previous years' depreciation expense to be $8,000 per year.
• B)Revise the depreciation expense to be $9,000 for years three through six.
• C)Continue to depreciate the bar at $6,000 per year and then show a loss when it removes the bar at the end of year six.
• D)Disclose the new information in the notes to the financial statements,but do not change anything else.

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Definitions:

Sound Waves

Vibrations that travel through the air or another medium and can be heard when they reach an ear.

Wavelength

The distance between successive crests of a wave, especially points in a sound wave or electromagnetic wave.

Opponent-Process Theory

A psychological and neurological model that explains how the perception of colors is controlled by two opposing systems, leading to color vision.

Afterimage

A visual phenomenon where an image continues to appear in one's vision after the exposure to the original image has ceased.