On January 1, 2016, Poultry Processing Company purchased a freezer and related installation equipment for $42,000. The

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On January 1, 2016, Poultry Processing Company purchased a freezer and related installation equipment for $42,000. The equipment had a three-year estimated life with a $3,000 salvage value. Straight-line depreciation was used. At the beginning of 2018, Poultry Processing revised the expected life of the asset to four years rather than three years. The salvage value was revised to $2,000.

Required

Compute the depreciation expense for each of the four years, 2016–2019.

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...
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Fundamental Financial Accounting Concepts

ISBN: 978-0078025907

9th edition

Authors: Thomas Edmonds, Christopher Edmonds

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