Holt Company purchased a computer for $8,000 on January 1, 2009. Straight-line depreciation is used, based on

Question:

Holt Company purchased a computer for $8,000 on January 1, 2009. Straight-line depreciation is used, based on a 5-year life and a $1,000 salvage value. In 2011, the estimates are revised. Holt now feels the computer will be used until December 31, 2012, when it can be sold for $500. Compute the 2011 depreciation.

Depreciation
Depreciation is an important concept in accounting. By definition, depreciation is the wear and tear in the value of a noncurrent asset over its useful life. In simple words, depreciation is the cost of operating a noncurrent asset producing... 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...