Question

Farmer Company purchased equipment on January 1, Year 1 for $82,000. The equipment is 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 Year 4, Farmer revised the expected life to eight years. The annual amount of depreciation expense for each of the remaining years would be:

Answer 1

The annual amount of depreciation expense for each of the remaining years would be:

$6240

Step-by-step explanation:

Equipment 82000

Life 5 years

Salvage 4000

Year Cost Annual Dep Book value

Year 1__________________ 78000 15600 62400

Year 2__________________ 62400 15600 46800

Year 3__________________ 46800 15600 31200

Year 4__________________ 31200 6240 24960

Year 5__________________ 24960 6240 18720

Year 6__________________ 18720 6240 12480

Year 7__________________ 12480 6240 6240

Year 8__________________ 6240 6240 0