Share
Explore BrainMass

Calculating revised depreciation

?- 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:

equip= 64,000 accum. dep. = 18,000

(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

Solution Preview

When useful life is revised, we start with the existing book value and then calculate ...

Solution Summary

The solution explains how to calculate the revised depreciation if there is a change in useful life

$2.19