What the depreciation expense to be recorded

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Question - You were assigned to audit the fixed assets of Malvar, Inc. for December 31, 20X5. In your permanent file was a machine purchased by the corporation on January 2, 20X2 for P300,000 which was being depreciated on a 10-year estimated life with no scrap value. Straight-line basis of depreciation was being used. On January 1, 20X5, Malvar, Inc. decided that the machine should have been depreciated on a 15-year life counted from the date of acquisition. Recorded depreciation in 20X5 was P30,000.

If the change in life is to be recognized, what the depreciation expense to be recorded in 20X5?

a. P14,000

b. P17,500

c. P20,000

d. P25,000

Reference no: EM133135306

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