An asset that originally cost $6,000 is being depreciated on the straight-line basis over an estimated useful life of 5 years.The estimated residual value was $1,500.Near the end of year 3,it was decided that better estimates would have been a total life of 6 years and a residual value of $800.Depreciation expense for year 3 would be:

Question

Quizplus · Accepted Answer

The depreciation expense for year 3 would be $850. This is calculated as follows:Depreciation expense = (Cost - Residual value) / Useful life= (6,000 - 800) / 6= $850

An Asset That Originally Cost $6,000 Is Being Depreciated on the Straight-Line