Acme Corp. purchased a new stamping machine for $100000, paid $10000 for shipping, and paid $ 5000 to have it installed in their plant. Based on an estimated salvage value of $ 25000 and an economic life of six years, the-difference between straight-line depreciation and double-declining balance depreciation in the second year of the asset’s life is closest to:（）
A．$15000.
B．$16666.
C．$10556.
参考答案：C
解析：
The asset is impaired because the carrying value is more than the undiscounted expected future cash flows. Discounted expected future cash flows are used to measure the amount of impairment, here 500000-380000=120000. The other statements are true. The impairment will be reported as an unusual or infrequent item in income from continuing operations. Writing down an asset decreases future depreciation expense and thus increases future income and leverage ratios. Assets are reduced, increasing future turnover ratios. The indicators of impairment given are correct. Straight line depreciation is (100000+10000+5000-25000)/6=15000 each year. Double-declining balance depreciation in the second year is: 115000×(2/3)×(1/3)=25556. The difference is $10556. Remember that salvage value is not part of the declining balance calculation.