Don's Copy Shop bought equipment for $90,000 on January 1, 2009. Don estimated the useful life to be 3 years with no salvage value, and the straight-line method of depreciation will be used. On January 1, 2010, Don decides that the business will use the equipment for 5 years. What is the revised depreciation expense for 2010?

Question

Quizplus · Accepted Answer

The equipment was initially depreciated over 3 years, so the first year's depreciation was $30,000. With a revised useful life of 5 years, the remaining book value of $60,000 is depreciated over the remaining 4 years, resulting in a revised annual depreciation expense of $15,000.

Don's Copy Shop Bought Equipment for $90,000 on January 1