Northeast Airlines purchased an aircraft on January 1, 2010, at a cost of $45,000,000 The estimated useful life of the aircraft is 20 years, with an estimated salvage value of $5,000,000 On January 1, 2013 the airline revises the total estimated useful life to 15 years with a revised salvage value ...

a Straightline Depreciable Depreciation Annual Accumulated Yea ...

Northeast Airlines purchased an aircraft on January 1, 2010, at a cost of $45,000,000. The estimated useful

Question:

Northeast Airlines purchased an aircraft on January 1, 2010, at a cost of $45,000,000. The estimated useful life of the aircraft is 20 years, with an estimated of $5,000,000. On January 1, 2013 the airline revises the total estimated useful life to 15 years with a revised of $4,000,000.

Instructions
(a) Compute the depreciation and book value at December 31, 2012 using the straight-line method and the double-declining-balance method.
(b) Assuming the straight-line method is used; compute the depreciation expense for the year ended December 31, 2013.

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...