Change in accounting method

Reference no: EM1365152

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 was expected to be $4 million.

At the beginning of 2011, Red decided to change the depreciation to the double-declining balance method. The residual value remains at $4 million.

Ignoring income taxes, what will be Red's depreciation expense for 2011?

Reference no: EM1365152

Questions Cloud

Find the time that the arrow spends in the air : Find out the time that the arrow spends in the air.

Capacity management problem : what capacity requirement should be planned? Assume that managment deems that a capacity cushion of 25 percent is appropriate.

Sociological-economic-legal or political implications : Identify and evaluate the ethical principles used in resolving ethical dilemmas, and to apply the principles to specific ethical issues that may have professional, sociological, economic, legal or political implications.

Calculate effective annual interest rate : Suppose you have worked out a line of credit arrangement that allows you to borrow up to $50 million at any time. The interest rate is .425% each month.

Change in accounting method : At the beginning of 2011, Red decided to change the depreciation to the double-declining balance method. The residual value remains at $4 million. Ignoring income taxes, what will be Red's depreciation expense for 2011?

Illustrate what is projected credit markets : Illustrate what is projected credit markets. How do you use this to make business decisions. Also how would investment or returns on excess cash affect a auto business.

Evaluating an economic event : What does it mean to critically evaluate an economic event or resource in the context of an accounting standard and what is actually being evaluated and how?

Capacity management problem - planning for future : Capacity Management problem - Planning for future If demand is expected to be 75 percent of the current level in five years and management wants to have a capacity cushion of just 5 percent, what capacity requirement should be planned?

Explain does a person who works for the government : Explain Does a person who works for the government have fewer rights than a person who works for a private employer?

User Account

All Pages