Equipment Was Purchased on January 5, Year 1, at a Cost

question 206

Essay

Equipment was purchased on January 5, year 1, at a cost of $90,000. The equipment had an estimated useful life of 8 years and an estimated residual value of $8,000.

After using the equipment for 3 years, the useful life was revised to a total of 10 years and the residual value was reduced to $2,004.

Determine the straight-line depreciation expense for the Year 4 and following years.

---

Definitions:

Passion to Master

A strong desire or drive to gain proficiency or expertise in a particular skill, subject, or activity.

Gifted Children

Refers to children who demonstrate exceptional levels of aptitude or competence in one or more areas at a young age.

Creativity

The ability to generate or recognize ideas, alternatives, or possibilities that may be useful in solving problems, communicating with others, and entertaining ourselves and others.

Novel Solutions

Refers to unique and creative answers or approaches to problems that have not been previously considered.