Dallas Company purchased a delivery van in 2010. At the time of purchase, the van's service life

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Dallas Company purchased a delivery van in 2010. At the time of purchase, the van's service life was estimated to be seven years with a salvage value of $500. The company has been using the straight-line method of depreciation. During 2013, the company determined that because of extensive use, the van's service life would be only five years with no salvage value. Also, the company has decided to change the depreciation method used from straight-line to the sum-of-the-years'- digits method. How would these changes be treated?
Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
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Intermediate Accounting

ISBN: 978-0538479738

18th edition

Authors: Earl K. Stice, James D. Stice

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