Lilly Company has been depreciating equipment for 10 years with an estimated total useful life of 25 years. Lilly has revised the estimated life to be only 17 years, with 7 years remaining in the asset's useful life. What is the appropriate action that Lilly should do now?

a. depreciate the remaining book value over the remaining 7 years of the asset's useful life.

b. record a change in estimate by recomputing depreciation of prior periods and restating prior period financial results accordingly.

c. continue to depreciate the equipment over the original 25-year life.

d. record a change in estimate by recomputing depreciation of prior periods and presenting the net depreciation adjustment as a cumulative effect change in accounting principle in the current period.

Answer rating: 100% (QA)

Answer a depreciate the remaining book value over the re... View the full answer