At the beginning of 2006, Hadaway Company acquired equipment costing \($80,000.\) It was estimated that this equipment would have a useful life of 6 years and a residual value of \($8,000\) at that time. The straight-line method of depreciation was considered the most appropriate to use with this type of equipment. Depreciation is to be recorded at the end of each year.

During 2008 (the third year of the equipment’s life), the company’s engineers reconsidered their expectations, and estimated that the equipment’s useful life would probably be 7 years (in total) instead of 6 years. The estimated residual value was not changed at that time. However, during 2011 the estimated residual value was reduced to \($4,000.\) 

Instructions 

Indicate how much depreciation expense should be recorded for this equipment each year by completing the following table.

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Year Depreciation Expense 2006 2007 2008 2009 2010 2011 2012 Accumulated Depreciation