On January 1, the Matthews Band pays $65,800 for sound equipment. The band estimates it will use

Question:

On January 1, the Matthews Band pays $65,800 for sound equipment. The band estimates it will use this equipment for four years and after four years it can sell the equipment for $2,000. Matthews Band uses straight-line depreciation but realizes at the start of the second year that this equipment will last only a total of three years. The salvage value is not changed.
Compute the revised depreciation for both the second and third years.

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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