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Sheridan Company purchased a machine on January 1, 2019, for $837000. At the date of acquisition, the machine had an estimated useful life of 6 years with no salvage. The machine is being depreciated on a straight-line basis. On January 1, 2022, Sheridan determined, as a result of additional information, that the machine had an estimated useful life of 8 years from the date of acquisition with no salvage. An accounting change was made in 2022 to reflect this additional information. Assume that the direct effects of this change are limited to the effect on depreciation and the related tax provision, and that the income tax rate was 30% in 2019, 2020, 2021, and 2022. What should be reported in Sheridan's income statement for the year ended December 31, 2022, as the cumulative effect on prior years of changing the estimated useful life of the machine? 000 O $83700 O $418500 O $0 O $55800

Sheridan Company purchased a machine on January 1, 2019, for $837000. At the date of acquisition, the machine had an estimated useful life of 6 years with no salvage. The machine is being depreciated on a straight-line basis. On January 1, 2022, Sheridan determined, as a result of additional information, that the machine had an estimated useful life of 8 years from the date of acquisition with no salvage. An accounting change was made in 2022 to reflect this additional information. Assume that the direct effects of this change are limited to the effect on depreciation and the related tax provision, and that the income tax rate was 30% in 2019, 2020, 2021, and 2022. What should be reported in Sheridan's income statement for the year ended December 31, 2022, as the cumulative effect on prior years of changing the estimated useful life of the machine? 000 O $83700 O $418500 O $0 O $55800

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Sheridan Company purchased a machine on January 1, 2019, for $837000. At the date of acquisition, the machine had an estimated useful life of 6 years with no salvage. The machine is being depreciated on a straight-line basis. On January 1, 2022, Sheridan determined, as a result of additional information, that the machine had an estimated useful life of 8 years from the date of acquisition with no salvage. An accounting change was made in 2022 to reflect this additional information. Assume that the direct effects of this change are limited to the effect on depreciation and the related tax provision, and that the income tax rate was 30% in 2019, 2020, 2021, and 2022. What should be reported in Sheridan's income statement for the year ended December 31, 2022, as the cumulative effect on prior years of changing the estimated useful life of the machine? O $83700 O $418500 $0 O $55800
Transcribed Image Text:Sheridan Company purchased a machine on January 1, 2019, for $837000. At the date of acquisition, the machine had an estimated useful life of 6 years with no salvage. The machine is being depreciated on a straight-line basis. On January 1, 2022, Sheridan determined, as a result of additional information, that the machine had an estimated useful life of 8 years from the date of acquisition with no salvage. An accounting change was made in 2022 to reflect this additional information. Assume that the direct effects of this change are limited to the effect on depreciation and the related tax provision, and that the income tax rate was 30% in 2019, 2020, 2021, and 2022. What should be reported in Sheridan's income statement for the year ended December 31, 2022, as the cumulative effect on prior years of changing the estimated useful life of the machine? O $83700 O $418500 $0 O $55800
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