Question

An asset was purchased for $101,000 on January 1, Year 1, and originally estimated to have a useful life of 12 years with a residual value of $12,000. At the beginning of the third year, it was determined that the remaining useful life of the asset was only 4 years with a residual value of $2,800. Calculate the third-year depreciation expense using the revised amounts and straight-line method. Round your answer to the nearest dollar.

Answer 1

Solution : Given data, assets purchased fer $101000 Useful life of 12 years with residual Value $ 12000 useful lite 4 4 years with residual value $ 2.800 Depreciation for year 1 and year 2 5. (101cam 11 000} * = 14833:3 Book value at the beginning of year 3 = Toloud-14833-3 = 861667 Revised depreciation for year 3 (86[667-2600)* - 2 20841.675 A, 20842