12.

Company X purchased equipment for $40,000 with a salvage value of $5,000 and useful life of 4 years. The equipment has been depreciated for three years. At the beginning of the fourth year, the company determined that the salvage value is $3,000 and the useful life is 5 years. What is the depreciation expense in year 4?

Group of answer choices

$5,375

$2,150

$8,750

$7,400

13.

Which of the following is true?

Group of answer choices

Restoration of impairment loss for an asset held for use is possible

Restoration of impairment loss is not possible under GAAP under any circumstances

Restoration of impairment loss for an asset to be disposed of is possible

Restoration of impairment loss is possible for both an asset to be disposed of and an asset held for use