Denim, Inc. purchased a building on January 1, 2010. The building cost $2,600,000 and had an estimated salvage value of $200,000. As of January 1, 2010, Denim estimated the useful life of the building to be 30 years. The building is depreciated using the straight-line method. On January 1, 2020, Denim, Inc. determined the building to have a remaining useful life of 15 years and an estimated salvage value of $300,000. What type of accounting change does this represent by placing an “X” in the space provided? ____Change in accounting principle. ____Change in accounting estimate. ____Change in reporting entity. ____Correction of an error.
Denim, Inc. purchased a building on January 1, 2010. The building cost $2,600,000 and had an estimated salvage value of $200,000. As of January 1, 2010, Denim estimated the useful life of the building to be 30 years. The building is depreciated using the straight-line method. On January 1, 2020, Denim, Inc. determined the building to have a remaining useful life of 15 years and an estimated salvage value of $300,000. What type of accounting change does this represent by placing an “X” in the space provided? ____Change in accounting principle. ____Change in accounting estimate. ____Change in reporting entity. ____Correction of an error.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 11E: On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an...
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Denim, Inc. purchased a building on January 1, 2010. The building cost $2,600,000 and had an estimated salvage value of $200,000. As of January 1, 2010, Denim estimated the useful life of the building to be 30 years. The building is
On January 1, 2020, Denim, Inc. determined the building to have a remaining useful life of 15 years and an estimated salvage value of $300,000.
- What type of accounting change does this represent by placing an “X” in the space provided?
____Change in accounting principle.
____Change in accounting estimate.
____Change in reporting entity.
____Correction of an error.
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