Refer to Fernbank Farms

Multiple Choice

Refer to Fernbank Farms. When calculating depreciation for 2013, the company's accountant should

A) add the $30,000 to the book value at December 31, 2012, and then allocate the revised depreciation basis over the remaining adjusted useful life of 5 years.
B) report the effect of the change in life as an expense on the income statement in 2011.
C) ignore the change in life on the original cost of $100,000 and depreciate the additional $30,000 cost separately over its useful life.
D) expense the $30,000 and depreciate the original cost of $100,000 over its revised estimated total live of 7 years.