Question

Tatsuo Corporation purchased farm equipment on January 1, 2019, for $280,000. In 2019 and 2020, Tatsuo depreciated the asset on a straight-line basis with an estimated useful life of five years and a $90,000 residual value. In 2021, due to changes in technology, Tatsuo revised the residual value to $30,000 but still plans to use the equipment for the full five years. What depreciation would Tatsuo record for the year 2021 on this equipment?

Multiple Choice

• $52,000.

• $58,000.

• $50,000.

• $28,000.

Answer 1

Answery Given data, cost = $ 280,000 Salvage value = $ 90000 useful life = 5 years Expense per annum Depreciation cost - Saluag evalue useful life 489000 – 90000 = =$38000 for 2 years = 38000 X 2 =$76000 In 2021, revised residual value = $39000 remaining usefu life = 3 years revised book value = 280,000 - 760000 = $ 204,000 depreciation for 20Q1 = $204,000 - $30,000 3 = $58000 : option t' is correct-