Please explain if there is a mistake within the problem .. What is the effect on
ID: 2477036 • Letter: P
Question
Please explain if there is a mistake within the problem..
What is the effect on Robert Griffin's proposed change on income before taxes in the year of the change?
3,500,000-300,000/8=$400,000
Accumulated depreciation expense after 2 years=2 x 400,000=$800,000
Book Value= 3,500,000-800,000=$2,700,000
Book Value after 2 years of depreciation 2,700,000
Less: New salvage value 200,000
Depreciable Cost 2,500,000
Remaining useful life 10 years
Revised annual depreciation 250,000
The effect on the proposed change makes the annual depreciation lower which makes the net income higher.
Explanation / Answer
NO,this answer is perfect.
Thank you...