A company purchased an asset on January 1, 2010, for $10,000 The asset was expected to have a ten year life and a $1,000 salvage value The company uses the straight line method of depreciation On January 1, 2012, the company made a major repair to the asset of $5,000, extending its life The asset i...

Original cost January 1 2010 10000 Less Accumulated depreciation 2 ...

A company purchased an asset on January 1, 2010, for $10,000. The asset was expected to have

Question:

A company purchased an asset on January 1, 2010, for $10,000. The asset was expected to have a ten-year life and a $1,000 . The company uses the straight-line method of depreciation. On January 1, 2012, the company made a major repair to the asset of $5,000, extending its life. The asset is expected to last ten years from January 1, 2012. Calculate the amount of depreciation for 2012.
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...