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Revision of Depreciation

Equipment with a cost of $$304,000$ has an estimated residual value of $$41,600,$ has an estimated useful life of $16$ years, and is depreciated by the straight$-$line method.

a$.$ Determine the amount of the annual depreciation.

$

b$.$ Determine the book value at the end of the tenth year of use.

$ $x$

c$.$ Assuming that at the start of the eleventh year the remaining life is estimated to be eight years and the residual value is estimated to be $$16,800,$ determine the depreciation expense for each of the remaining eight years.

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Straight$-$line depreciation allocates the depreciable cost of the asset equally over the expected useful life.

The book value is the fixed asset cost less accumulated depreciation.

Revising depreciation is necessary when estimates of residual values and$/$or useful lives of fixed assets change due to abnormal wear and tear or obsolescence.

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