Question

The Donut Stop acquired equipment for $20,000. The company uses straight-line depreciation and estimates a residual value of $4,000 and a four-year service life. At the end of the second year the company estimates that the equipment will be useful for four additional years, for a total service life of six years rather than the original four. At the same time, the company also changed the estimated residual value to $1,000 from the original estimate of $4,000.

Required:
Calculate how much The Donut Stop should record each for depreciation in years 3 to 6.



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  • CreatedJuly 15, 2014
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