Change in Estimates

On January 1, 2012, Roosters Co. purchases equipment for $30,000 and estimates a useful life of eight years and a salvage value of $2,000. On January 1, 2014, Roosters revises the equipment's useful life from eight years to five years. Roosters uses the straight-line method of depreciation.

For both sections below, round your final answers to the nearest whole number.

Required: a. Calculate depreciation expense for 2012, 2013, and 2014.

Year Depreciation Expense

2012

2013

2014

b. Recalculate 2014 depreciation expense assuming that Roosters leaves the useful life at eight years but reduces the salvage value to $0.