Question

edugen wileyplus.com WileyPLUS Calculator Kimmel, Financial Accounting, se Help System Announcements CALCULATOR PRINTER VERSION HACK NEXT Do It! Review 9-2b Flounder Corp. purchased a piece of equipment for $51,500. It estimated a 7-year life and $2,000 salvage value. At the end of year 3 (before the depreciation adjustment), it estimated the new total life to be 9 years and the new salvage value to be $5,000. Compute the revised depreciation Company uses straight-line depreciation method. (Round answer to o decimal places, e.g. 125.) Revised depreciation I LINK TO TEXT

Answer 1

Depreciation for first 3 years :

Depreciation per Annum = ( cost - residual value ) / useful life =

= (51,500-2,000)/7 =$ 7,071

Accumulated Depreciation = 7,071*4 = $ 28,284

Revised Depreciation per annum=( cost - revised residual value - Accumulated depreciation )/Revised remaining useful life

= (51,500-5,000- 28,284) / 5 = $ 3,643

Note: 1. Revised residual value and revised useful life already given in the question.

2. Amount of accumulated depreciation is calculated after rounding off depreciation per annum .

3. Since useful life and salvage value is change at the end of 3rd year so depreciation is revised from year 4 onwards.. 4. All the amount expressed in dollers.