equipment costing $110000 with a salvage value of $15000 and an estimated life o
ID: 2343021 • Letter: E
Question
equipment costing $110000 with a salvage value of $15000 and an estimated life of 8 years has been Kimmel, Accounting, 6e 134 Equipment costing $110000 with a salvage value of $15000 and an estimated life of 8 years has been depreciated using the straight-line rounde d) tor Years, Assurming a revised estimated total life of 6 years and no change in the salvage value, the depreciation expense $15833. $23750. O $11875. Open Show Work Click if you would like to Show Work for this question: LINK TO TEXT SAVE FOR LATER Question Attempts: 0 of 1 used 320 PM DOLLExplanation / Answer
Answer
A
Original Cost
$ 110,000
B
Original Salvage value
$ 15,000
C = A-B
Original Depreciable base
$ 95,000
D
Original Life
8
E = C/D
Annual Depreciation as per SLM
$ 11,875
F =E
Year 1 Depreciation expense
$ 11,875
G = E
Year 2 Depreciation expense
$ 11,875
H = A - F - G
Book Value at the time of revision of estimates
$ 86,250
I
Salvage Value
$ 15,000
J = H - I
Depreciable base [New]
$ 71,250
K
New life [total]
6
L = 6 years - 2 years passed
Life remaining
4
K = J/L
Depreciation expense for Year 3
$ 17,813
Correct Answer
Option #2: $ 17,813
A
Original Cost
$ 110,000
B
Original Salvage value
$ 15,000
C = A-B
Original Depreciable base
$ 95,000
D
Original Life
8
E = C/D
Annual Depreciation as per SLM
$ 11,875
F =E
Year 1 Depreciation expense
$ 11,875
G = E
Year 2 Depreciation expense
$ 11,875
H = A - F - G
Book Value at the time of revision of estimates
$ 86,250
I
Salvage Value
$ 15,000
J = H - I
Depreciable base [New]
$ 71,250
K
New life [total]
6
L = 6 years - 2 years passed
Life remaining
4
K = J/L
Depreciation expense for Year 3
$ 17,813
Correct Answer
Option #2: $ 17,813
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