Final answer:
The depreciation expense of the machine in 2022 is calculated using the straight-line method with the revised salvage value and total life. The calculation involves spreading the remaining carrying amount over the remaining years, using the formula (Original Cost - Revised Salvage Value) / Revised Total Life.
Step-by-step explanation:
To calculate the depreciation expense of the machine in 2022 using the straight-line method, we first need to have the original cost of the machine, the adjusted salvage value, and the adjusted total life of the machine. Since these details are not provided in the question, we will assume that the original cost of the machine (not given) is already known. With the revised salvage value set to $25,000 and the total life extended to 7 years, the depreciation expense for 2022 can be calculated as follows:
Depreciation Expense = (Original Cost - Revised Salvage Value) / Revised Total Life
This will give us the annual depreciation expense. If there are any years the machine has already been used for, the accumulated depreciation for those years should be subtracted from the original cost before performing the calculation. Once the annual depreciation expense is determined for 2022, this amount will be recognized as an expense in the income statement.
It's important to note that when the total life of an asset is revised, the remaining carrying amount (original cost minus accumulated depreciation) is spread over the remaining life as per the revised estimate.