Question

Apex Fitness Club uses straight-line depreciation for a machine costing $20,300, with an estimated four-year life and a $1,900 salvage value. At the beginning of the third year, Apex determines that the machine has three more years of remaining useful life, after which it will have an estimated $1,450 salvage value, Required: 1. Compute the machine's book value at the end of its second year. 2. Compute the amount of depreciation for each of the final three years given the revised estimates. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the machine's book value at the end of its second year. 20,300 Book Value at the End of Year 2: Cost Accumulated depreciation 2 years Book value at point of revision $ 20,300 Required 2 >

Answer 1

Page 0 Ove 3 Using Straight Line Method of Depreciation : Depreciation & - Colt - salvare value useful life of affet Depreciation = $20300 - $1500 = $4600 per year Depreciation for 2 years = $4600 X 2= $9200 Book value at the end of year 2: les : Cost Accumulated Book sale Depreciation years at point of revision $ 20300 $9200 $11100 Revised Depreciation a year 3-5 & 100 $ 1450 $ 9650 A Book value at point of revision By Revised salwage value c) Remaining Deprecable cost (A-B) by Year of life remaining E) Renifed Annual Depreciation years 3-5 (C&D) $ 3217