Question
Apex Fitness Club uses straight-line depreciation for a machine costing $26,700, with an estimated four-year life and a $2,850 salvage value. At the beginning of
Apex Fitness Club uses straight-line depreciation for a machine costing $26,700, with an estimated four-year life and a $2,850 salvage value. At the beginning of the third year, Apex determines that the machine has three more years of remaining useful life, after which it will have an estimated $2,400 salvage value. Required: 1. Compute the machines book value at the end of its second year. 2. Compute the amount of depreciation for each of the final three years given the revised estimates
1.
Cost
Accumulated depreciation 2 years
Book value at point of revision
2.
Book value at point of revision
Revised salvage value
Remaining depreciable cost
Years of life remaining
Revised annual depreciation year (3-5)
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