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Assume the company uses straight-line depreciation for the equipment. At the beginning of the second year, we determine that the equipment has only two
Assume the company uses straight-line depreciation for the equipment. At the beginning of the second year, we determine that the equipment has only two more years of remaining useful life. Compute depreciation for the second year given the revised useful life estimate. Revised Depreciation for Second Year Book value at point of revision Remaining depreciable cost Revised salvage value Years of life remaining Revised annual depreciation for second year 32,500 10,000 $ 16,250 23
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