Final answer:
After adjusting for the revised useful life and salvage value of the equipment, the correct amount of depreciation for 2013 is $33,000, calculated based on the remaining useful life and net book value at the beginning of 2013.
Step-by-step explanation:
To calculate the new depreciation expense for 2013 after the adjustment of the equipment's useful life and salvage value, we have to first determine the amount of depreciation that has already been taken during the first three years (2010-2012). Using the straight-line method, the annual depreciation through 2012 was:
Annual Depreciation = (Cost - Salvage Value) / Useful Life = ($340,000 - $40,000) / 6 = $300,000 / 6 = $50,000
Since the equipment was depreciated for 3 years, the accumulated depreciation by the end of 2012 is 3 * $50,000 = $150,000.
The book value at the beginning of 2013 is therefore the original cost minus the accumulated depreciation:
Book Value at Beginning of 2013 = Original Cost - Accumulated Depreciation = $340,000 - $150,000 = $190,000
With the revised life expectancy of 8 years in total and the revised salvage value of $25,000, there are 5 more years to depreciate the asset (2013-2017). Therefore, the revised annual depreciation is:
Revised Annual Depreciation = (Book Value at the beginning of 2013 - Revised Salvage Value) / Remaining Useful Life = ($190,000 - $25,000) / 5 = $165,000 / 5 = $33,000
Hence, option b ($33,000) is the correct answer for the amount to be recorded for depreciation for the year 2013.