Question

equipment costing $110000 with a salvage value of $15000 and an estimated life of 8 years has been

Kimmel, Accounting, 6e 134 Equipment costing $110000 with a salvage value of $15000 and an estimated life of 8 years has been depreciated using the straight-line rounde d) tor Years, Assurming a revised estimated total life of 6 years and no change in the salvage value, the depreciation expense $15833. $23750. O $11875. Open Show Work Click if you would like to Show Work for this question: LINK TO TEXT SAVE FOR LATER Question Attempts: 0 of 1 used 320 PM DOLL

Answer 1

Answer

• All working forms part of the answer

A	Original Cost	$                                       110,000
B	Original Salvage value	$                                         15,000
C = A-B	Original Depreciable base	$                                         95,000
D	Original Life	8
E = C/D	Annual Depreciation as per SLM	$                                         11,875
F =E	Year 1 Depreciation expense	$                                         11,875
G = E	Year 2 Depreciation expense	$                                         11,875
H = A - F - G	Book Value at the time of revision of estimates	$                                         86,250
I	Salvage Value	$                                         15,000
J = H - I	Depreciable base [New]	$                                         71,250
K	New life [total]	6
L = 6 years - 2 years passed	Life remaining	4
K = J/L
	Depreciation expense for Year 3	$                                         17,813
	Correct Answer	Option #2: $ 17,813

• Correct Answer Option #2: $ 17,813