Final answer:
The correct amount of depreciation expense to be recorded on December 31, 2015, using the straight-line method after the company revised the equipment's useful life, is $1,500. Initially, the annual depreciation was $1,000, but after adjusting for the new five-year life span, starting in 2015, it becomes $1,500 annually.
Step-by-step explanation:
When the equipment was purchased on July 1, 2013, it was expected to last for nine years. Using the straight-line method of depreciation, the initial annual depreciation expense would be calculated by dividing the cost of the equipment, $9,000, by its useful life, which is 9 years. This gives an annual depreciation expense of $1,000 ($9,000 ÷ 9 years).
By January 1, 2015, one and a half years of that useful life has passed, leaving seven and a half years. However, on this date, the company revises the useful life to be a total of six and a half years from the purchase date (one and a half years used plus five more years). The accumulated depreciation till December 31, 2014, will be $1,500 ($1,000 per annum × 1.5 years). The book value of the asset at the beginning of 2015 will therefore be $7,500 ($9,000 initial cost - $1,500 accumulated depreciation).
The remaining book value must be spread over the remaining life of the asset, which is now five years. Hence, the annual depreciation for the years 2015 to 2019 is $1,500 ($7,500 book value ÷ 5 years). Therefore, the amount of depreciation expense recorded on December 31, 2015, should be $1,500.