Rabbit Company purchased equipment with a cost of $570,000, with an estimated residual value of $30,000, and an estimated life of 15 years. After 5 full years of recording depreciation by the straight-line method, it was determined that due to obsolescence, the equipment's useful life should be reduced by 5 years and the residual value changed to zero.
The depreciation expense for year 6 is:

Question

Quizplus · Accepted Answer

Annual depreciation _($₅₇_{0,000 - $}₃_{0,000) / 15 = $}₃₆_,000 11ee7640_e1cb_fae3_90da_6d9ac8ac8b40_TBCB1007_00 Revised depreciation for Years 6 - 10: $390,000 / 5 = $78,000 per year

Rabbit Company Purchased Equipment with a Cost of $570,000, with an Estimated