Question

purchased a depreciable asset for $604000 on January 1, 2018. The estimated salvage value is $64000, and the estimated useful life is 9 years. The straight-line method is used for depreciation. In 2021, Sheffield changed its estimates to a total useful life of 5 years with a salvage value of $81000. What is 2021 depreciation expense?

Answer 1

$171,500

Step-by-step explanation:

The computation of the depreciation expense for the year 2021 is shown below:

For accumulated depreciation

= ($604,000 - $64,000) × 3 years ÷ 9 years

= $180,000

Now the depreciation expense for the year 2021 is

= ($604,000 - $180,000 - $81,000) ÷ ( 5 years - 3 years)

= $171,500

Hence, the depreciation expense for the year 2021 is $171,500