Apex Fitness Club uses straight-line depreciation for a machine costing $26,650,

Question

Apex Fitness Club uses straight-line depreciation for a machine costing $26,650, with an estimated fouryear life and$2750 salvage value. At the beginning of the third year, Apex determines that the machine has three more years of remaining useful life, after which It will have an estimated $2,300 salvage value. Required: 1. Compute the machine's book value at the end of its second year. 2. Compute the amount of depreciation for each of the final three years given the revised estimates. Complete this question by entering your answers in the tabs below Required 1Required 2 Compute the amount of depreciation for each of the final three years given the revised estimates. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) Revised Depreciation (Years 3-5) Book value at point of revision Revised salvage value Remaining depreciable cost Years of life remaining Revised annual depreciation years (3-

Explanation / Answer

Book Value at the End of Year 2: Cost 26650 Accumulated depreciation 2 years -11,950 =(26650-2750)/4*2 Book value at point of revision 14,700 2 Revised Depreciation (Years 3-5) Book value at point of revision 14700 Revised salvage value -2,300 Remaining depreciable cost 12,400 Years of life remaining 3 Revised annual depreciation years 3-5 4133

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