Question

Waterway's Copy Shop bought equipment for $457800 on January 1, 2017. Waterway estimated the useful life to be 3 years with no salvage value, and the straight-line method of depreciation will be used. On January 1, 2018, Waterway decides that the business will use the equipment for a total of 5 years. What is the revised depreciation expense for 2018?

Answer 1

--Correct Answer = $ 76,300

--Working

A	Original Cost	$           457,800.00
B	Residual Value	$                             -
C=A - B	Depreciable base	$           457,800.00
D	Life [in years]	3 years
E=C/D	Depreciation for year 2017	$           152,600.00
F = A - E	Book Value at the time of revision	$           305,200.00
G = 5 years - 1 year passed	Remaining useful life	4 years
H = F/G	Revised Depreciation expense for 2018	$              76,300.00 = ANSWER