Question $5$

Tweed Feed & Seed purchased a new machine on January $1,2023$:

Cost when acquired

$$260,000$

Estimated residual value

$$260,000$

Estimated useful life

$40,000$

$10$ years

Accumulated depreciation at the end of year $5($assume straight$-$line depreciation$)110,000$

It is now the beginning of year $6$ and the management reevaluated the estimates related to the machine. Compute the depreciation expense for year $6$ under each of the following independent cases:

Case

Event

Depreciation Expense

A The estimated total useful life is changed to $15$ years

B The residual value is changed to zero; useful life unchanged.

C The estimated total useful life is changed to $8$ years and the residual value is changed to $$10,000.$