Reno Company purchased equipment on January 1, 2010 for $82,000. The equipment is estimated to have a 5-year life and a salvage value of $5,000. The company used the straight-line depreciation method.
If the original expected life remained the same (i.e., 5-years), but at the beginning of 2015 the salvage value were revised to $6,000, the annual depreciation expense for each of the remaining years would be:

Question

Quizplus · Accepted Answer

The book value at the beginning of 2015 is $82,000 - ($15,400 * 5) = $5,000. With a revised salvage value of $6,000, the remaining depreciation expense is $0, resulting in no annual depreciation expense for the remaining years.

Reno Company Purchased Equipment on January 1, 2010 for $82,000