Myst Company purchased a computer for $7,000 on January 1, 2007. Straight-line depreciation is used, based on

Question:

Myst Company purchased a computer for $7,000 on January 1, 2007. Straight-line depreciation is used, based on a 5-year life and a $1,000 salvage value. In 2009, the estimates are revised. Myst now feels the computer will be used until December 31, 2010, when it can be sold for $500. Compute the 2009 depreciation.

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...