Question

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. adjusted 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. adjusted 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

Answer 1

The accountant should depreciate the remaining book value of the building over the revised remaining life of 10 years, following the adjustment in the building's estimated useful life.

Step-by-step explanation:

When the estimated life of a building is adjusted, the accountant should depreciate the remaining book value over the new estimated remaining life of the asset. This means that after 30 years of depreciation, with an original estimated life of 50 years, the remaining undepreciated value of the building should now be depreciated over the revised remaining life of 10 years. This change acknowledges the updated expectation of the asset's useful life and helps to ensure that the depreciation expense is recorded in a manner that more accurately reflects the economic usage of the building.