The Maple Corp

question 56

Multiple Choice

The Maple Corp. bought its factory building in 1990. At the time, it expected to use the factory for 40 years, so it depreciated it using a 40-year life. In 2016, it decided that the factory will last for 50 years. Under GAAP, Maple Corp. should

• A) Restate its financial statements since the factory was bought, to reflect depreciation based on a 50-year life of the factory
• B) Not restate any prior year statements, but adjust the opening balance for accumulated depreciation in 2016 to be what it should have been, using depreciation based on a 50-year estimated life, and use the 50-year life for future years
• C) Reflect the change in estimate in 2016 and future years, without making any adjustment for using the 40-year estimate in the past
• D) Make no adjustments, and continue to use the original 40-year estimate

---

Definitions:

Southern Hemisphere

The half of Earth that lies south of the equator, encompassing parts of South America, Africa, Australia, and Antarctica.

CFCs

stands for chlorofluorocarbons, which are compounds previously used in aerosols, refrigerants, and foam blowing agents that contribute to ozone layer depletion.

Political Community

A group of people who share a common political identity or ideology and are often governed under the same political structure or system.

Scientific Community

A group of scientists and researchers who collaborate and communicate their findings and theories across various disciplines.