Question

# Equipment with a cost of \$80,989.00, an estimated residual value of \$6,709.00, and an estimated life...

Equipment with a cost of \$80,989.00, an estimated residual value of \$6,709.00, and an estimated life of 13 years was depreciated by the straight-line method for 6 years. Due to obsolescence, it was determined that the remaining useful life should be shortened by 3 years and the residual value changed to zero. The depreciation expense for the current and future years is

\$11,676.48

\$5,189.55

\$3,592.76

\$34,283.08

 Annual depreciation before changes Annual Depreciation = (Cost Of The Asset- Salvage Value)/ Life Of The Asset = \$80989-6709/13 years = \$5713.85 per year Accumulated depreciation at the end of year 6 =\$5713.85*6 =\$34283.10 Book value = \$80989-34283.10 =\$46705.90 Revised depreciation per year Revised life remaining life = 13-6-3 =4 years Annual Depreciation = (Cost Of The Asset- Salvage Value)/ Life Of The Asset = \$46705.9-0/4 years = \$11676.48 per year