Revising depreciation estimates

Revising depreciation estimates - and that its salvage...

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Revising depreciation estimates.  Depreciation expense calculations depend upon estimates of an  asset's useful life and expected salvage value. As time passes, a number of factors may cause these  estimates to change. For example, after recording three years of depreciation expense on the truck,  suppose the company decides the truck should be useful until it is seven rather than five years old 
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Unformatted text preview: and that its salvage value will be $14,000 instead of $10,000. Prior financial statements are not changed when useful life or salvage value estimates change, but subsequent depreciation expense calculations must be based upon the new estimates of the truck's useful life and depreciable cost....
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This note was uploaded on 11/14/2011 for the course ACCT 1310 taught by Professor Staff during the Fall '10 term at Texas State.

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