Wilma's Wicker Furniture purchased a laser-guided mitre saw on September 1, 2018 at a cost of $20,000. Depreciation for 2018 and 2019 was based on an estimated 8-year useful life and $4,000 estimated residual value. In 2020, Wilma's revised its estimates and now believes the laser mitre saw will have a total service life of an additional three years but the residual value will be only $2,000. Wilma's uses the straight-line method to depreciate all assets. Wilma's Wicker Furniture has a December 31 year end.
Instructions
Calculate depreciation expense for 2018, 2019, and 2020.

Question

Quizplus · Accepted Answer

The Answer of Wilma's Wicker Furniture purchased a laser-guided mitre saw on September 1, 2018 at a cost of $20,000. Depreciation for 2018 and 2019 was based on an estimated 8-year useful life and $4,000 estimated residual value. In 2020, Wilma's revised its estimates and now believes the laser mitre saw will have a total service life of an additional three years but the residual value will be only $2,000. Wilma's uses the straight-line method to depreciate all assets. Wilma's Wicker Furniture has a December 31 year end.
Instructions
Calculate depreciation expense for 2018, 2019, and 2020.

Wilma's Wicker Furniture Purchased a Laser-Guided Mitre Saw on September