申論題

G. King, Inc. purchases equipment for $1,000,000 on January 2, 2016. The equipment has a useful life of five years, is depreciated using the straight-line method of depreciation, and its residual value is zero. King chooses to revalue its equipment to fair value over the life of equipment. King employs an independent appraiser, who determines that the fair value of equipment at December 31, 2016, is $950,000. Assuming no change in the useful life of the equipment, King determines through appraisal that the equipment now has a fair value of $550,000 at December 31, 2017.