A truck that cost $8,000 was originally being depreciated over 4 years using the straight-line method with no salvage value. At the beginning of year two, it was decided that the truck would last 5 more years. Given this information, the second year's depreciation would be

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Quizplus · Accepted Answer

The original annual depreciation for 4 years is $8,000 ÷ 4 = $2,000. 
At the beginning of year two, one year of depreciation has already been taken, so there will be three more years of depreciation to take based on the original depreciation schedule.
The new total time for depreciation is 4 + 3 = 7 years. 
Using the straight-line method, the new annual depreciation would be $8,000 ÷ 7 = $1,142.86, which rounds up to $1,200. 
Therefore, the second year's depreciation would be $1,200.

A Truck That Cost $8,000 Was Originally Being Depreciated Over