Question

On January 1, 2020, the Concord Company ledger shows Equipment $36,000 and Accumulated Depreciation―Equipment $10,100. The depreciation resulted from using the straight-line method with a useful life of 7 years and salvage value of $5,000. On this date, the company concludes that the equipment has a remaining useful life of only 4 years with the same salvage value. Compute the revised annual depreciation.

Answer 1

$5150

Step-by-step explanation:

Revised Book value =$36000-$10400

=$25600

Salvage value= $5000

Years=4

Annual Depreciation = (Book value - Dep) / Time

=($25600-$5000) / 4

=$20600 / 4

=$5150

The annual depreciation for another 4 years is = $5150