Final answer:
The depreciation expense for Smart Touch Learning's van in 2020 is $1,200, following a revision of the useful life from 5 years to 8 years.
Step-by-step explanation:
To calculate depreciation expense for Smart Touch Learning's van using the straight-line depreciation method for the year 2020, we need to adjust the previous annual depreciation expense based on the revised estimated useful life.
The original cost of the van was $20,000, and its original estimated residual value was $5,000, giving us a depreciable base of $15,000 over 5 years. Thus, the initial annual depreciation would have been $15,000 / 5 = $3,000 per year for the years 2017, 2018, and 2019.
By the beginning of 2020, the van would have already been depreciated for 3 years, so the accumulated depreciation would be 3 * $3,000 = $9,000. This leaves a book value of $20,000 - $9,000 = $11,000 as of January 1, 2020.
With the revised estimated useful life extending to 8 years total, starting from 2017, there are now 5 years remaining (2020 to 2024 inclusive). To find the new annual depreciation expense, we subtract the estimated residual value from the current book value and divide the result by the remaining years:
New Annual Depreciation = ($11,000 - $5,000) / 5 = $1,200
Thus, the depreciation expense for the year 2020 will be $1,200.