Equipment costing $70,000 with a salvage value of $14,000 and an estimated life of 8 years has been depreciated using the straight-line method for 2 years. Assuming a revised estimated total life of 6 years and no change in the salvage value, the depreciation expense for Year 3 would be
A) $10,500.
B) $9,333.
C) $14,000.
D) $7,000.

Question

Quizplus · Accepted Answer

The depreciation expense for Year 3 would be $10,500. This is calculated as follows:Depreciation expense = (Cost - Salvage value) / Estimated life= (70,000 - 14,000) / 6= $10,500

Equipment Costing $70,000 with a Salvage Value of $14,000 and an Estimated