Equipment costing $120,000 with a salvage value of $12,000 and an estimated life of 8 years has been depreciated by Davey Company using the straight-line method for 2 years.
Assuming a revised estimated total life of 6 years, and no change in the salvage value, determine the depreciation expense for Year 3.
A) $20,250
B) $ 8,001
C) $ 9,000
D) $64,000

Question

Quizplus · Accepted Answer

Annual depreciation = _($₁₂_{0,000 - $}₁₂_{,000) / 8 = $}_13,5₀₀ 11ee7640_e1cb_1081_90da_053295ab5f97_TBCB1007_00 Revised depreciation for Years 3 - 6: $81,000 / 4 = $20,250 per year

Equipment Costing $120,000 with a Salvage Value of $12,000 and an Estimated