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)Do not adjust prior year's depreciation.
C)Adjust the amount of accumulated depreciation as at the beginning of the year.
D)Compute current year depreciation as (carrying amount)X 15/20.

Question

Quizplus · Accepted Answer

When a company changes the estimated useful life of an asset, it does not adjust prior years' depreciation. Instead, it applies the change prospectively, meaning it calculates future depreciation based on the new estimate without altering past records.

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