Equipment was purchased at a cost of $20,000 at the beginning of 2009. It has been depreciated at $2,000 per year over its ten-year estimated useful life. The company is preparing its 2013 financial statements (the net book value of the equipment is $12,000); management now estimates that the remaining useful life is three years and at the end of that time the residual value will be $3,000. Assuming that the company continues to use the straight-line method of depreciation, how much will be charged to depreciation expense in 2013?

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The Answer of Equipment was purchased at a cost of $20,000 at the beginning of 2009. It has been depreciated at $2,000 per year over its ten-year estimated useful life. The company is preparing its 2013 financial statements (the net book value of the equipment is $12,000); management now estimates that the remaining useful life is three years and at the end of that time the residual value will be $3,000. Assuming that the company continues to use the straight-line method of depreciation, how much will be charged to depreciation expense in 2013?

Equipment Was Purchased at a Cost of $20,000 at the Beginning