?- my ledger shows equiptment = 64,000, accumulated depreciation = 18,000 you use straight line method with a 10 yr useful life and 4,000 salveage and then on this date of jan. 1 2007 it is determined that the useful life is only 5 yrs but the salvage value is the same. compute the revised annual depreciation.
I came up with:
(64,000 + 18,000- 4,000 = 78,000
annual depreciation = 78,000 / 5= 15,600.00
-----but i think it could be
64,000 -18,000- 4,000= 42,000 annual depreciation = 42,000 / 5 = 8,400.00
please explain which way it should be and tell me if this is what the answer should look like or show me what it should look more like if possible- thank you
When useful life is revised, we start with the existing book value and then calculate ...
The solution explains how to calculate the revised depreciation if there is a change in useful life