Refer to Exhibit 23-2.The adjusting entry that should be made on January 1, 2014, will be in the amount of

A) $4, 000
B) $4, 800
C) $2, 400
D) $ 0

Question

Refer to Exhibit 23-2.The adjusting entry that should be made on January 1, 2014, will be in the amount ofA) $4, 000B) $4, 800C) $2, 400D) $ 0

taylor libby · Accepted Answer

Final Answer : D, Explanation :  The machine was initially being depreciated over 8 years with no salvage value, which means an annual depreciation of $6,000 ($48,000 / 8 years). After 4 years (by the end of 2013), total depreciation would be $24,000. With the revision to a total useful life of 10 years starting from the acquisition date, the remaining book value ($24,000) would be spread over the remaining 6 years, resulting in an annual depreciation of $4,000. There is no need for an adjusting entry on January 1, 2014, specifically to change the depreciation method or amount; the change is in the future depreciation expense calculation.

Refer to Exhibit 23-2.The adjusting entry that should be made on January 1, 2014, will be in the amount of

A) $4, 000
B) $4, 800
C) $2, 400
D) $ 0

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