A machine originally had an estimated useful life of 5 years, but after 3 comple
ID: 2502364 • Letter: A
Question
A machine originally had an estimated useful life of 5 years, but after 3 complete years, it was decided that the original estimate of useful life should have been 10 years. At that point the remaining cost to be depreciated should be allocated over the remaining: 2 years5 years
7 years
8 years
10 years A machine originally had an estimated useful life of 5 years, but after 3 complete years, it was decided that the original estimate of useful life should have been 10 years. At that point the remaining cost to be depreciated should be allocated over the remaining:
Explanation / Answer
7 years.
There are only two years left of the estimated 5 years span. However, the useful life should have been 10. Hence:
(The two remaining years of the 5 year estimated depreciation span) + (The five years extra of the machine's useful life) = 7 years