Question

CALCULATOR FULL SCREEN PRINTER VERSION ESOURCES BACK NEXT Do It! Review 9-02b 9-09 x Your answer is incorrect. Try again v9-02a w 9-026 Cheyenne Corp. purchased a piece of equipment for $38,000. It estimated a year life and $1,520 salvage value. At the end of year 4 (before the depreciation adjustment), it estimated the new total life to be 10 years and the new salvage value to be $3,040. Compute the revised depreciation Company uses straight-line depreciation method. (Round answer to o decimal places, e.g. 125.) ts by Study Revised depreciation LINK TO TEXT By accessing this Question Assistance, you will learn while you eam points based on the Point Potential policy set by your instructor Question Attempts: 4 of 5 usedSAVE FOR LATER SUBMIT ANSWER

Answer 1

Cost of equipment - 28,000 Life = 8 years Salvage value = 1520 Depreciation - 38000-1520 = 4560 p.a for 1st year Book value of equipment & end of year = 38000 - 4560 -4560-4560 - 24320 At the end of year 4 before depreciaton adjustment Life = 10 years Salvage value = 3040 Book value @ end of yea@ = 24320 Depreciation - 24320 - 3040 = 8188 pod depreciation - 2128 pa co Revreed

depreciation for the 4th year

=( 24320-3040+1520)/ remaining useful life

Remaining useful life = 7 years

= 22800/7

= 3255.55 ( revised depreciation from the 4rh year )

Accountibg treatment for change in estimated life of asset should be made prospectively