The estimated life of a building that has been depreciated 30 years of an originally estimated life of 50 years has been revised to a remaining life of 10 years. Based on this information, the accountant should
A) continue to depreciate the building over the original 50-year life.
B) depreciate the remaining book value over the remaining life of the asset.
C) adjust accumulated depreciation to its appropriate balance, through net income, based on a 40-year life, and then depreciate the adjusted book value as though the estimated life had always been 40 years.
D) adjust accumulated depreciation to its appropriate balance through retained earnings, based on a 40-year life, and then depreciate the adjusted book value as though the estimated life had always been 40 years.

Question

Quizplus · Accepted Answer

When the estimated life of an asset is revised, the remaining book value (cost minus accumulated depreciation) should be depreciated over the new remaining life. In this case, since the building's remaining life is now 10 years, the remaining book value should be depreciated over these 10 years.

The Estimated Life of a Building That Has Been Depreciated