Equipment Was Acquired on January 1, 2012, at a Cost

question 119

Essay

Equipment was acquired on January 1, 2012, at a cost of $90,000. The equipment was originally estimated to have a residual value of $5,000 and an estimated life of 10 years. Depreciation has been recorded through December 31, 2013, using the straight-line method. On January 1, 2014, the estimated residual value was revised to $6,000 and the useful life was revised to a total of 8 years.
Instructions
Determine the depreciation expense for 2014.

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Definitions:

Qualifying Expenses

Expenses that are approved under tax law as deductible from gross income to reduce taxable income.

AGI Limitations

Thresholds or caps based on Adjusted Gross Income that limit eligibility for certain tax deductions, credits, or benefits.

Credit for The Elderly

A tax credit available to elderly taxpayers or those who are permanently and totally disabled, to reduce their income tax liability.

Education Credits

Financial incentives in the form of tax credits for taxpayers who have incurred education expenses, aimed at reducing the cost of education.