Answered

Westonci.ca is the best place to get answers to your questions, provided by a community of experienced and knowledgeable experts. Connect with a community of experts ready to provide precise solutions to your questions quickly and accurately. Join our platform to connect with experts ready to provide precise answers to your questions in different areas.

In Year 1, a company purchased equipment that cost $70,000. The equipment has a useful life of seven years and no salvage value. The company used the straight-line method to depreciate the equipment and reported $10,000 of depreciation expense in Years 1 and 2. At the beginning of Year 3, the company determines that the equipment will last for only three more years (five years total) and changes the depreciable life of the asset accordingly. What amount of depreciation expense should the company report in Year 3?

Sagot :

anthougo

The amount of depreciation expense  in Year 3 is $16,667.

Data and Calculations:

Cost of Equipment purchased in Year 1 = $70,000

Estimated useful life = 7 years

Estimated salvage value = $0

Depreciable amount = $70,000 ($70,000 - $0)

Method of Depreciation = Straight-line method

Annual depreciation expense = $10,000 ($70,000/7)

Accumulated Depreciation after 2 years = $20,000

Net book value after two years = $50,000 ($70,000 - $20,000)

Re-estimated remaining useful life after the first two years = 3 years

Depreciation expense in Year 3 = $16,667 ($50,000/3)

Thus, the company should report a depreciation expense of $16,667 in Year 3.

Learn more: https://brainly.com/question/19091134

We hope you found this helpful. Feel free to come back anytime for more accurate answers and updated information. We appreciate your time. Please revisit us for more reliable answers to any questions you may have. Thank you for using Westonci.ca. Come back for more in-depth answers to all your queries.