When originally purchased, a vehicle costing $24,300 had an estimated useful life of 8 years and...

When originally purchased, a vehicle costing $24,300 had an estimated useful life of 8 years and an estimated salvage value of $2,300. After 4 years of straight-line depreciation, the asset's total estimated useful life was revised from 8 years to 6 years and there was no change in the estimated salvage value. The depreciation expense in year 5 equals:

Expert Solution

Depreciation= (Cost-Salvage Value)/Useful life

		Amount $
Cost	a	$ 24,300.00
Salvage Value	b	$ 2,300.00
Useful Life(Years)	c	8
Depreciation p.a.	d=(a-b)/c	$ 2,750.00	(24,300-2300)/8
Depreciation charged for 4 years	*e=d4**	$ 11,000	(2750*4)
Book value after 4 years	f=a-e	$ 13,300	(24300-11000)
Remaining useful life(years)	g=c-4	4.00	(8-4)
Revised Remaining useful life(years)	h=g-2	$ 2.00	(4-2)
Depreciation to be charged for 5th year	i=(f-b)/h	$ 5,500.00	(13,300-2300)/2

ekkarill92 answered 1 year ago

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