On January 1, 2012, the Dancing Gorillas Company ledger shows Equipment $29,000 and Accumulated DepreciationEquipment $9,000. The

Question:

On January 1, 2012, the Dancing Gorillas Company ledger shows Equipment $29,000 and Accumulated Depreciation—Equipment $9,000. The depreciation resulted from using the straight-line method with a useful life of 10 years and of $2,000. On this date, the company concludes that the equipment has a remaining useful life of only 4 years with the same . Compute the revised annual 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...