26. McDonald Company acquired machinery on January 1, 2015 which it depreciated under the straight-line method with an estimated life of fifteen years and no salvage value. On January 1, 2020, McDonald estimated that the remaining life of this machinery was six years with no salvage value. How should this change be accounted for by McDonald? A) By setting future annual depreciation equal to one-sixth of the book value on January 1, 2020 B) By continuing to depreciate the machinery over the original fifteen year life C) As the cumulative effect of a change in accounting principle in 2020 D) As a prior period adjustment

Jason Co purchased a machinery for £100,000 on 1/1/2018. It had an estimated useful life of ten years and it was depreciated using the reducing balance method at a rate of 20%. On 1/1/20 it was decided to change the depreciation method to the straight line. There was no change to the useful life, and no residual value is anticipated.   What are the accumulated depreciation and the net book value of the asset for the year ended 31 December 2021?

On January 1, 2016, Rexford Company purchased a drilling machine for $11,500. The machines has an estimated useful life of 4 years and a salvage value of $200. Given this information, if Rexford uses double-declining-balance method of depreciation, and sells the machine on December 31, 2017, for $3,000 cash. Then how much will be gain or loss on disposal of this asset?   $ 2,750 loss $ 1,800 loss $1,562 gain $ 125 gain

Lugar Company purchased a piece of machinery for $28,500 on January 1, 2016, and has been depreciating the machine using the sum-of-the-years'-digits method based on a five-year estimated useful life and no salvage value. On January 1, 2018, Lugar decided to switch to the straight-line method of depreciation. The salvage value is still zero and the estimated useful life is changed to a total of six years from the date of purchase. Ignore income taxes. Required:1. Prepare the appropriate journal entry, if any, to record the accounting change under GAAP.2. Prepare the journal entry to record depreciation for 2018.

Quayle Company acquired machinery on January 1, 2005 which it depreciated under the straight-line method with an estimated life of fifteen years and no salvage value. On January 1, 2010, Quayle estimated that the remaining useful life of this machinery was six years with no salvage value. How should this change be accounted for by Quayle? As a prior period adjustment O As the cumulative effect of a change in accounting principle in 2010. O By setting future annual depreciation equal to one-sixth of the book value on January 1, 2010 O By continuing to depreciate the machinery over the original fifteen year life.

(a) Situation 1: Cheyenne Corporation purchased electrical equipment at a cost of $11,500 on June 2, 2020. From 2020 through 2023, the equipment was depreciated on a straight-line basis, under the assumption that it would have a 10-year useful life and a $1,900 residual value. After more experience and before recording 2024's depreciation, Cheyenne revised its estimate of the machine's useful life downward from a total of 10 years to 8 years, and revised the estimated residual value to $1,900. On April 29, 2025, after recording part of a year's depreciation for 2025, the company traded in the equipment for a newer model, and received a $3,700 trade-in allowance, even though the equipment's fair value was only $2,600. The new asset had a list price of $14,200 and the supplier accepted $10,500 cash for the balance. The new equipment was depreciated on a straight-line basis, assuming a seven-year useful life and a $1,130 residual value. Determine the amount of depreciation expense…