On January 1, 2012, Harris Machining Co. purchased a compressor and related installation equipment for $64,000. The

Question:

On January 1, 2012, Harris Machining Co. purchased a compressor and related installation equipment for $64,000. The equipment had a three-year estimated life with a $4,000 salvage value. Straight-line depreciation was used. At the beginning of 2014, Harris revised the expected life of the asset to four years rather than three years. The salvage value was revised to $3,000.

Required

Compute the depreciation expense for each of the four years.

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...