3. Revised Depreciation Year #1 - Machine Cost 50,000 Salvage value 5,000 Useful Life 5 yr and life. -use straight line depreciation - in the beginning of year 4 add a module that increases usefulness Cost of Module 10,000 Extends life to a total of: 8 yr (i.e. 3 more years) SV decreases to 3,000 Prepare journal entry to record modification Calculate depreciation expense for the end of year 4 4. Disposal of Capital Asset Asset Cost 100,000 Accumulated Depreciation to date of disposal = 75,000 Proceeds = 20,000 Prepare the journal entries for disposal