On January 1,2011,Handy Manufacturing Company paid $50,000 for equipment with an estimated useful life of 5 years and $3,000 expected salvage value.The company uses straight-line depreciation.If the adjustment for depreciation is NOT made,net income for the year ended December 31,2011 will be ________.

Question

Quizplus · Accepted Answer

The annual depreciation expense is calculated as ($50,000 - $3,000) / 5 = $9,400. If depreciation is not recorded, net income will be overstated by this amount.

On January 1,2011,Handy Manufacturing Company Paid $50,000 for Equipment with an Estimated