Meca Concrete purchased a mixer on January 1, 2016, at a cost of $45,000. Straight-line depreciation for 2016 and 2017 was based on an estimated eight-year life and $3,000 estimated residual value. In 2018, Meca revised its estimate and now believes the mixer will have a total service life of only six years, and that the residual value will be only $2,000.
Required:
Compute depreciation for 2018 and 2019.

Question

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The Answer of Meca Concrete purchased a mixer on January 1, 2016, at a cost of $45,000. Straight-line depreciation for 2016 and 2017 was based on an estimated eight-year life and $3,000 estimated residual value. In 2018, Meca revised its estimate and now believes the mixer will have a total service life of only six years, and that the residual value will be only $2,000.
Required:
Compute depreciation for 2018 and 2019.

Meca Concrete Purchased a Mixer on January 1, 2016, at a Cost