On January 1, 2017, Airedale Company purchased new equipment for $1,125,000. The equipment had an estimated $90,000 salvage value at the end of its estimated ten-year useful life. Straight-line depreciation has been recorded. Before adjusting the accounts for 2022, Airedale Company reduces the useful life of the equipment by one year and decreases the salvage value to $67,500.
Required:
a. Calculate the 2022 depreciation expense.
b. What is the equipment's book value at the end of 2022 after recording the 2022 depreciation expense?

Question

Quizplus · Accepted Answer

The Answer of On January 1, 2017, Airedale Company purchased new equipment for $1,125,000. The equipment had an estimated $90,000 salvage value at the end of its estimated ten-year useful life. Straight-line depreciation has been recorded. Before adjusting the accounts for 2022, Airedale Company reduces the useful life of the equipment by one year and decreases the salvage value to $67,500.
Required:
a. Calculate the 2022 depreciation expense.
b. What is the equipment's book value at the end of 2022 after recording the 2022 depreciation expense?

On January 1, 2017, Airedale Company Purchased New Equipment for $1,125,000