South Airlines purchased a 747 aircraft on January 1, 2017, at a cost of $35,000,000. The estimated useful life of the aircraft is 20 years, with an estimated salvage value of $5,000,000. On January 1, 2020 the airline revises the total estimated useful life to 15 years with a revised salvage value of $3,500,000.
Instructions
(a) Compute the depreciation and book value at December 31, 2019 using the straight-line method and the double-declining-balance method.
(b) Assuming the straight-line method is used, compute the depreciation expense for the year ended December 31, 2020.

Question

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The Answer of South Airlines purchased a 747 aircraft on January 1, 2017, at a cost of $35,000,000. The estimated useful life of the aircraft is 20 years, with an estimated salvage value of $5,000,000. On January 1, 2020 the airline revises the total estimated useful life to 15 years with a revised salvage value of $3,500,000.
Instructions
(a) Compute the depreciation and book value at December 31, 2019 using the straight-line method and the double-declining-balance method.
(b) Assuming the straight-line method is used, compute the depreciation expense for the year ended December 31, 2020.

South Airlines Purchased a 747 Aircraft on January 1, 2017