13 On January 1 of Year 1, a company purchased a piece of equipment for $1,200,000 that had an estimated useful life of 8 years and no salvage value The equipment was depreciated by the double-declining-balance (DDB) method On January 1 of Year 3, the company changes to the straight-line method. Accumulated depreciation at the end of Year 2 is $525,000. If the straight-line method had been used, the accumulated depreciation at the end of Year 2 would have been $300,000. What is the retroactive adjustment to the accumulated depreciation account on January 1 of Year 3" O $0 Ⓒ$525,000 Ⓒ$300,000 Ⓒ$225,000
13 On January 1 of Year 1, a company purchased a piece of equipment for $1,200,000 that had an estimated useful life of 8 years and no salvage value The equipment was depreciated by the double-declining-balance (DDB) method On January 1 of Year 3, the company changes to the straight-line method. Accumulated depreciation at the end of Year 2 is $525,000. If the straight-line method had been used, the accumulated depreciation at the end of Year 2 would have been $300,000. What is the retroactive adjustment to the accumulated depreciation account on January 1 of Year 3" O $0 Ⓒ$525,000 Ⓒ$300,000 Ⓒ$225,000
Chapter1: Financial Statements And Business Decisions
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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![13
On January 1 of Year 1, a company purchased a piece of equipment for $1,200,000 that had an estimated useful life of 8 years and no salvage value. The equipment was depreciated by the double-decining-balance (DDB) method
On January 1 of Year 3, the company changes to the straight-line method. Accumulated depreciation at the end of Year 2 is $525,000. If the straight-line method had been used, the accumulated depreciation at the end of Year 2 would have been $300,000.
What is the retroactive adjustment to the accumulated depreciation account on January 1 of Year 3"
$0
O $525,000
O $300,000
O $225,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb6c008bc-63e1-4097-bda5-a2051b7d7428%2Fd5dd4f77-9d4e-478c-9a97-7df1af17f355%2Fea66ie9_processed.png&w=3840&q=75)
Transcribed Image Text:13
On January 1 of Year 1, a company purchased a piece of equipment for $1,200,000 that had an estimated useful life of 8 years and no salvage value. The equipment was depreciated by the double-decining-balance (DDB) method
On January 1 of Year 3, the company changes to the straight-line method. Accumulated depreciation at the end of Year 2 is $525,000. If the straight-line method had been used, the accumulated depreciation at the end of Year 2 would have been $300,000.
What is the retroactive adjustment to the accumulated depreciation account on January 1 of Year 3"
$0
O $525,000
O $300,000
O $225,000
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