Ask Question
15 May, 01:51

Greg's Copy Shop bought equipment for $60,000 on January 1, 2006. Greg estimated the useful life to be 3 years with no salvage value, and the straight-line method of depreciation will be used. On January 1, 2007, Greg decides that the business will use the equipment for a total of 5 years. What is the revised depreciation expense for 2007? a. $20,000b. $8,000c. $10,000d. $15,000

+4
Answers (1)
  1. 15 May, 05:34
    0
    c. $10,000

    Explanation:

    Depreciation per year = (Cost of equipment - Salvage) / useful life

    Depreciation for 1 year (Jan 1,2006 - Jan, 2007) = (60000-0) / 3 = 20,000

    However, on January 2007, the remaining useful life will change from 2 years to 5-1 = 4 years

    Beginning 2007,

    accumulated depreciation = 20,000

    Remaining Book value of equipment = 60,000 - 20,000 = 40,000

    Depreciation for Year 2007 will be = ($40,000 - 0) / 4 = $10,000
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Greg's Copy Shop bought equipment for $60,000 on January 1, 2006. Greg estimated the useful life to be 3 years with no salvage value, and ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers