When originally purchased,a vehicle costing $23,000 had an estimated useful life of 8 years and an estimated salvage value of $3,000.After 4 years of straight-line depreciation,the asset's total estimated useful life was revised from 8 years to 6 years and there was no change in the estimated salvage value.The depreciation expense in year 5 equals:
A)$5,000.
B)$2,875.
C)$5,750.
D)$11,500.
E)$2,500.

Question

Quizplus · Accepted Answer

The depreciation expense for the first 4 years is $20,000 / 8 = $2,500 per year. After the revision, the remaining useful life is 6 - 4 = 2 years. The remaining depreciable amount is $23,000 - $3,000 - $2,500 * 4 = $11,000. The depreciation expense for the remaining 2 years is $11,000 / 2 = $5,500. The depreciation expense in year 5 is $5,500.

When Originally Purchased,a Vehicle Costing $23,000 Had an Estimated Useful