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

Finance Mar 23, 2021

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:

1. 2 years
2. 5 years
3. 7 years
4. 8 years
5. 10 years

Expert Solution

Answer: C . 7 years

Explanation:

Useful life previously estimated = 5 years

After three years when the balance life left is= 2 years

The firm decided to consider the total life of 10 years.

Which means 2 + 5 = 7years are left for which the remaining value is scattered.

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