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

question 52

Multiple Choice

The method of depreciation was changed from the double-declining-balance method to the straight-line method in fiscal 2022. A machine was purchased on January 1, 2020, at a cost of $150,000. The machine has an estimated useful life of 10 years and a residual value of $9,000. Assume that net income before tax NIBT) was $102,000 for fiscal 2021. What is the appropriate accounting for fiscal 2021?

• A)Retrospective adjustment and revised NIBT of $87,900.
• B)Retrospective adjustment and revised NIBT of $126,000.
• C)Retrospective adjustment and revised NIBT of $111,900.
• D)No accounting is necessary in fiscal 2021.

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Definitions:

Turner

Could refer to various contexts, like Joseph Turner, the British landscape painter, but without additional context, a precise definition isn't possible here.

Categorization

The cognitive process of organizing information by placing it into categories based on common features or characteristics.

Group Attribution Error

The tendency to overemphasize dispositional or personality-based explanations for the behavior of individuals in a group, while underestimating the role of external factors.

Stereotyped Thinking

The practice of having oversimplified and generalized beliefs about certain groups or categories of people.