The Method of Depreciation Was Changed from the Double-Declining-Balance Method

question 156

Multiple Choice

The method of depreciation was changed from the double-declining-balance method to the straight-line method in fiscal 2019.A machine was purchased on January 1,2017,at a cost of $150,000.The machine has an estimated useful life of 10 years and a residual value of $9,000.What adjustment is needed for fiscal 2017?

• A)$14,100
• B)$15,900
• C)$24,000
• D)$30,000

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Definitions:

Useful Life

The estimated period of time over which a fixed asset is expected to be usable by the business, influencing depreciation calculations.

Depreciation Expense

The allocated cost of using a fixed asset over its useful life, reflecting its decrease in value over time.

Straight-line Method

A method for calculating depreciation of an asset, which assumes the asset will lose an equal amount of value each year over its useful life.

Depreciation Expense

The allocation of the cost of an asset over its useful life, reflecting the decrease in value of the asset over time due to usage, wear and tear, or obsolescence.