Equipment with a cost of $160,000, an estimated residual value of $40,000, and an estimated life of 15 years was depreciated by the straight-line method for 4 years. due to obsolescence, it was determined that the remaining useful life should be shortened by 3 years and the residual value changed to zero. the depreciation expense for the current and future years is:

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19 September, 07:38

Equipment with a cost of $160,000, an estimated residual value of $40,000, and an estimated life of 15 years was depreciated by the straight-line method for 4 years. due to obsolescence, it was determined that the remaining useful life should be shortened by 3 years and the residual value changed to zero. the depreciation expense for the current and future years is:

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Lincoln Schneider · Answer 1

Straight-line Depreciation = (160,000 - 40,000) / 15 = 8,000

4 Years of Depreciation = 8,000 * 4 = 32,000

Current Value = 160,000 - 32,000 = 128,000

Updated residual value = 0

Depreciation Over Remaining 8 years = 128,000