Caterpillars,Inc. ,a manufacturing company,acquired equipment on January 1,2014 for $530,000.Estimated useful life of the equipment was seven years and the estimated residual value was $13,000.On January 1,2017,after using the equipment for three years,the total estimated useful life has been revised to nine total years.Residual value remains unchanged.The company uses the straight-line method of depreciation.Calculate depreciation expense for 2017.(Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar. )

Question

Quizplus · Accepted Answer

B)Straight-line depreciation = (Cost - Residual value)/ Useful life
Straight-line depreciation = (530,000 - 13,000)/ 7 = 73,857.14
Depreciation provided for first three years = 73,857.14 × 3 = $221,571.42
Revised depreciation for the remaining useful life = ($530,000 - $221,571.42 - $13,000)/ 6 = $49,238