Refer to Exhibit 23-3.If the revised estimated useful life of the truck is a total of seven years, and assuming an income tax rate of 30%, Kathy should report in its 2011 income statement an effect on prior years of changing the useful life of the truck of

A) $ 0
B) $16, 800
C) $ 5, 600
D) $58, 800

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Nicoy Smith · Accepted Answer

Final Answer : A, Explanation :  When Kathy revises the estimated useful life of the truck from five to seven years, the change affects depreciation expense calculations from 2011 onwards. There is no retroactive effect on prior years' financial statements for changes in accounting estimates, such as useful life revisions. Therefore, there is no effect on prior years to report in the 2011 income statement.

Refer to Exhibit 23-3.If the revised estimated useful life of the truck is a total of seven years, and assuming an income tax rate of 30%, Kathy should report in its 2011 income statement an effect on prior years of changing the useful life of the truck of

A) $ 0
B) $16, 800
C) $ 5, 600
D) $58, 800

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Refer to Exhibit 23-3.If the revised estimated useful life of the truck is a total of seven years, and assuming an income tax rate of 30%, Kathy should report in its 2011 income statement an effect on prior years of changing the useful life of the truck ofA) $ 0B) $16, 800C) $ 5, 600D) $58, 800

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