Equipment was acquired on January 1, 2009, at a cost of $190,000. The equipment was originally estimated

Question:

Equipment was acquired on January 1, 2009, at a cost of $190,000. The equipment was originally estimated to have a salvage value of $10,000 and an estimated life of 10 years. Depreciation has been recorded through December 31, 2011, using the straight-line method. On January 1, 2012, the estimated salvage value was revised to $16,000 and the useful life was revised to a total of 8 years.

Instructions

Determine the depreciation expense for 2012 and prepare the journal entry to record the depreciation expense for the year of 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...