In 2013,Blanton Company bought equipment with a cost of $160,000,an estimated residual value of $40,000,and an estimated life of 15 years.It was depreciated by the straight-line method for four years.Due to obsolescence,it was determined at the beginning of 2017 that the useful life should be shortened by three years and the residual value changed to zero.The depreciation expense for 2017 is

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The equipment had an original cost of $160,000, an estimated residual value of $40,000, and an estimated life of 15 years. Therefore, the annual depreciation expense was:

($160,000 - $40,000) / 15 = $8,000

After four years of use, the accumulated depreciation is:

$8,000 x 4 = $32,000

At the beginning of 2017, the company determined that the useful life should be shortened by three years and the residual value changed to zero. Therefore, the remaining useful life is:

15 years - 4 years - 3 years = 8 years

And the revised annual depreciation expense is:

($160,000 - $0) / 8 = $20,000

The depreciation expense for 2017 will be for the remaining 8 years of the equipment's useful life, so it will be:

$20,000 x 8 / 12 = $16,000

In 2013,Blanton Company Bought Equipment with a Cost of $160,000,an