At the beginning of 2013, Sullivan Company acquired equipment costing $300,000. It was estimated that this equipment

Question:

At the beginning of 2013, Sullivan Company acquired equipment costing $300,000. It was estimated that this equipment would have a useful life of 6 years and a salvage value of $30,000 at that time. The straight-line method of depreciation was considered the most appropriate to use with this type of equipment. Depreciation is to be recorded at the end of each year.

During 2015 (the third year of the equipment's life), the company's engineers reconsidered their expectations and estimated that the equipment's useful life would probably be 7 years (in total) instead of 6 years. The estimated salvage value was not changed at that time. However, during 2018, the estimated salvage value was reduced to $5,000.

Instructions

Indicate how much depreciation expense should be recorded for this equipment each year by completing the followingtable.

At the beginning of 2013, Sullivan Company acquired equipment costing

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...