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NEW QUESTION: 1
Mellow Co. depreciated a $12,000 asset over five years, using the straight-line method with no salvage
value. At the beginning of the fifth year, it was determined that the asset will last another four years. What
amount should Mellow report as depreciation expense for year 5?
A. $600
B. $900
C. $2,400
D. $1,500
Answer: A
Explanation:
Choice "a" is correct. Over the first 4 years, the asset would be depreciated down to $2,400. Once it was
determined that the asset would last for another 4 years, $600 would be depreciated each year of that 4
year period. This change is a change in accounting estimate (the estimate being the life of the asset).
Changes is accounting estimate are accounted for in the current year and future years if the change
affects both. Choice "b" is incorrect. This answer is the annual difference between the depreciation
expense IF depreciation expense had been retroactively restated ($24,000 / 8 = $1,500) and the correct
depreciation expense. Retroactive restatement is not appropriate for changes in accounting estimate.
Choice "c" is incorrect. This answer is the depreciation expense IF depreciation had been retroactively
restated ($24,000 / 8 = $1,500). Retroactive restatement is not appropriate for changes in accounting
estimate. Choice "d" is incorrect. This answer is the undepreciated amount at the beginning of the fifth
year or the amount of the annual depreciation expense for each of the first 4 years. Either way, it certainly
is not going to be the depreciation expense for that year because the remaining cost will depreciated over
the remaining period.

NEW QUESTION: 2
A client wants to enlarge its existing IT infrastructure storage capacity by also reusing existing storage. The client is looking at the IBM Storwize family.
Which tool should be used to assist with justifying the acquisition?
A. IBM Business Value Accelerators
B. ROInow!
C. TCOnow!
D. IBM Storwize RAS Business Advantage Calculator
Answer: C

NEW QUESTION: 3
A firm can pursue a differentiation strategy on the basis of
I). its product.
II). method of delivery.
III). economies of scale.
IV). production process.
V. marketing approach.
VI). can charge a higher price while attempting to retain cost parity with its competitors.
A. I, II, III, V, VI.
B. I, II, V, VI.
C. All of them.
Answer: B

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