Lauter Tun Corporation acquired equipment on January 1, 2012, for $300,000. The
ID: 2590284 • Letter: L
Question
Lauter Tun Corporation acquired equipment on January 1, 2012, for $300,000. The equipment had an estimated useful life of 10 years and an estimated salvage value of $25,000. On January 1, 2015, Lauter Tun Corporation revised the total useful life of the equipment to 8 years and the estimated salvage value to be $10,000. Compute depreciation expense for the year ending December 31, 2015, if Lauter Tun Corporation uses straightline depreciation.
2015, Lauter Tun Corporation revised the to a usefu ie o the equ m tto 8 years and the Lauter Tun Corporation acquired equipment on January 2012 for $300,000. The equipment had an esimated useful ife of10 years and an estimated sa age value25 000 On January eatmated salvage velue to be $10,000, Compute depreciation expense for the year ending December 31, 2015, if Lauter Tun Corporation uses streight-line depreciation. OA. $43,500 OB. S25.938 O C. $41,500 OD. $38,500Explanation / Answer
Depreciation per year=(Cost-Residual value)/Useful life
=(300,000-25000)/10=$27500
Hence book value as on January 1,2015=300,000-(27500*3)=$217500
Hence revised Depreciation=(217500-10,000)/5 years
=$41500.
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