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Farmer Company purchased equipment on January 1,2015 for $82,000.The machines are estimated to have a 5-year life and a salvage value of $4,000.The company uses the straight-line depreciation method.
-At the beginning of 2018,Furst revised the expected life to eight years.The annual amount of depreciation expense for each of the remaining years would be:
A)$6,240.
B)$4,400.
C)$7,040.
D)$3,900.

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The correct answer is A. The annual amount of depreciation expense for each of the remaining years would be $6,240. This is calculated by taking the difference between the cost of the equipment and the salvage value, and dividing that number by the remaining life of the equipment. In this case, the cost of the equipment is $82,000, the salvage value is $4,000, and the remaining life of the equipment is 5 years. This gives us a depreciation expense of $6,240 per year.

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