Ch8. Video 14 - Changes in Estimates example

The video tutorial explains how to handle changes in depreciation calculations for a copy machine at a pop-up company. Initially, the useful life of the machine is extended, requiring recalculations. Later, both the useful life and salvage value change, prompting further adjustments. The tutorial guides through these recalculations step-by-step, ensuring the depreciation expense aligns with the new parameters.

What is the initial cost of the copy machine as mentioned in the setup?

• $14,000

• $16,000

• $18,000

• $20,000

In the fourth year, the useful life of the copy machine was extended to how many years?

• 10 years

• 8 years

• 9 years

• 7 years

What is the new annual depreciation expense after the useful life is extended to nine years?

• $600

• $700

• $800

• $900

What is the accumulated depreciation balance at the end of the fourth year after recalculating?

• $9,000

• $8,400

• $8,000

• $7,200

When both the useful life and salvage value change, what is the new salvage value?

• $1,200

• $1,600

• $1,800

• $1,400

What is the new annual depreciation expense when both the useful life and salvage value change?

• $1,600

• $1,400

• $1,200

• $1,000

What is the accumulated depreciation at the end of the ninth year when both the useful life and salvage value change?

• $15,600

• $12,000

• $13,200

• $14,400