Question

In year 6, Spirit, Inc. determined that the 12‐year estimated useful life of a machine purchased...

In year 6, Spirit, Inc. determined that the 12‐year estimated useful life of a machine

purchased for $48,000 in January year 1 should be extended by three years. The machine is

being depreciated using

the straight‐line method and has no salvage value. What amount of

depreciation expense should Spirit report in its financial statements for the year ending

December 31, year 6?

A. $2,800

B. $3,200

C. $43,200

D. $4,800

i need the specific solution

Business   Accounting   
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Homework Answers

Answer #1
a Original Cost                48,000.00
b Initial Life 12 Years
c=a/b Depreciation per year                  4,000.00
d Depreciation for 5 year               20,000.00
( 4000 * 5 year)
e=c-d Book Value               28,000.00
Remaining life as per initial life at beginning of 6th year 7 =12 year - 5years
Extended life 3 Years
Revised life 10 Years
e/f= Depreciation for the 6th year                  2,800.00
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