Question

Kimmel, Accounting, 7e WileyUS US I Help Contact PRINCIPLES OF ACCOUNTING (ACET Assignment Gradebook ORION Downloadable eTextbook CALCULATO R SCREEN PRINTER VERSION Do It! Review 9-02b Your answer is incorrect. Try again. Martinez Corp. purchased a piece of equipment for $46,000. It estimated a 8 year life and $1.840 salvage value. At the end of year 4 (before the depreciation adjustment), estimated the new totale to be 10 years and the new salvage value to be $3,680. Compute the revised depreciation. Companuses straight-line depreciation method. (Round answer to o decimal places, e.. 125.) Revised depreciation LINK TO TEXT By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor Question Attempts: 2 of 5 used SAVE FOR LATER a les 2000-2009 cho W slice i ns. All Rights Reserved. A Division of the W

Answer 1

Solution:

Existing annual depreciation = ($46,000 -$1,840) / 8 = $5,520

Book value at beginning of year 4 = $46,000 - ($5,520*3) = $29,440

Computation of revise annual depreciation
Particulars	Equipment
Book value at beginning of year 4	$29,440.00
Revised salvage value	$3,680.00
Remaining cost to be depreciated	$25,760.00
Total revised useful life	10
Life already elapsed	3
Remaining useful life	7
Revised annual depreication	$3,680.00