SportsWorld uses straight-line depreciation for a piece of equipment that cost $12,000, had a salvage value of $2,000, and a five-year service life. At the end of the first year, an impairment loss of $2,000 was recognized on the asset. Calculate the amount ofdepreciation expense for each of the remaining years of the asset's useful life.

Question

Quizplus · Accepted Answer

After the impairment, the new book value is $8,000 ($12,000 - $2,000 impairment - $2,000 first-year depreciation). The remaining depreciation is $6,000 ($8,000 - $2,000 salvage value) over 4 years, resulting in $1,500 per year.

SportsWorld Uses Straight-Line Depreciation for a Piece of Equipment That