Jantz Corporation purchased a machine on July 1, 2004, for $750,000.The machine was estimated to have a useful life of 10 years with an estimated salvage value of $42,000.During 2007, it became apparent that the machine would become uneconomical after December 31, 2011, and that the machine would have no scrap value.Accumulated depreciation on this machine as of December 31, 2006, was $177,000.What should be the charge for depreciation in 2007 under generally accepted accounting principles?

Question

Quizplus · Accepted Answer

The machine's remaining useful life was revised to 5 years (2007-2011) with no salvage value. The book value at the start of 2007 is $750,000 - $177,000 = $573,000. Depreciation for 2007 is $573,000 / 5 = $114,600.

Jantz Corporation Purchased a Machine on July 1, 2004, for $750,000.The