Question

To determine a new depreciation amount after a change in estimate of a plant asset's useful life, the asset's remaining depreciable cost is divided by its remaining useful life

1. true
2. false

Answer 1

The statement is 1. true.

Step-by-step explanation:

The statement that to determine a new depreciation amount after a change in the estimate of a plant asset's useful life, the asset's remaining depreciable cost is divided by its remaining useful life is true.

When an asset's estimated useful life changes, it is necessary to spread the remaining depreciable cost—cost less accumulated depreciation—over the new remaining estimated life. This is done in order to match the asset's cost to the revised period over which the asset is expected to generate economic benefits for the business.