South Airlines purchased a 747 aircraft on January 1 2015 at a cost of $35000000. The estimated useful life of the aircraft is 20 years with an estimated salvage value of $5000000. On January 1 2018 the airline revises the total estimated useful life to 15 years with a revised salvage value of $3500000.
Instructions
(a) Compute the depreciation and book value at December 31 2017 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 2018.

Question

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The Answer of South Airlines purchased a 747 aircraft on January 1 2015 at a cost of $35000000. The estimated useful life of the aircraft is 20 years with an estimated salvage value of $5000000. On January 1 2018 the airline revises the total estimated useful life to 15 years with a revised salvage value of $3500000.
Instructions
(a) Compute the depreciation and book value at December 31 2017 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 2018.

South Airlines Purchased a 747 Aircraft on January 1 2015