Intermediate Accounting
Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
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Chapter 20, Problem 20.16E

Accounting change

• LO20–4

The Peridot Company purchased machinery on January 2, 2016, for $800,000. A five-year life was estimated and no residual value was anticipated. Peridot decided to use the straight-line depreciation method and recorded $160,000 in depreciation in 2016 and 2017. Early in 2018, the company revised the total estimated life of the machinery to eight years.

Required:

1. What type of change is this?

2. Briefly describe the accounting treatment for this change.

3. Determine depreciation for 2018.

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Chapter 20 Solutions

Intermediate Accounting

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Depreciation -MACRS; Author: Ronald Moy, Ph.D., CFA, CFP;https://www.youtube.com/watch?v=jsf7NCnkAmk;License: Standard Youtube License