Chap020 (accounting) 60 - 51 Red Corp constructed a machine...

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51. Red Corp. constructed a machine at a total cost of $70 million. Construction was completed at the end of 2007 and the machine was placed in service at the beginning of 2008. The machine was being depreciated over a 10-year life using the straight-line method. The residual value is expected to be $4 million. At the beginning of 2011, Red decided to change to the sum-of-the-years'-digits method. The residual value remains at $4 million. Ignoring income
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Unformatted text preview: taxes, what will be Red's depreciation expense for 2011? A. $4.8 million. B. $5.4 million. C. $6.6 million. D. $11.55 million. A change in depreciation AACSB: Analytic Bloom's: Application Learning Objective: 20-04 Explain how and why changes in estimates are reported prospectively. Level of Learning: Hard...
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