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Problem 1: Bailey Limited has discovered that the estimated useful life for a material depreciable asset is incorrect due to a change in the way the asset is being used. The correct accounting treatment for this event is to
Option 1: treat it as a change in an accounting estimate and adjust retrospectively.
Option 2: treat it as a change in an accounting estimate and adjust prospectively
Option 3: treat it as an error and adjust retrospectively.
Option 4: disclose the change in the notes to the financial statements.
Financial Statement Analysis and Preparation
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T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .
Computation of Free Cash Flow
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