Exhibit 23-3 Kathy Company Acquired a Truck on January 1

Multiple Choice

Exhibit 23-3 Kathy Company acquired a truck on January 1, 2010, for $140, 000.The truck had an estimated useful life of five years with no salvage value.Kathy used straight-line depreciation for the truck.On January 1, 2011, Kathy revises the estimated useful life of the truck.Kathy made the accounting change in 2011 to reflect the extended useful life.
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Refer to Exhibit 23-3.If the revised estimated useful life of the truck is a total of seven years, and assuming an income tax rate of 30%, Kathy should report in its 2011 income statement an effect on prior years of changing the useful life of the truck of

A) $ 0
B) $16, 800
C) $ 5, 600
D) $58, 800