Chapter $8$

Exploration $8\mathrm{.}4$a $-$ Change in Life$/$Residual $(08)$

Goal: Learn how to calculate revised depreciation.

Instructions: You are given information about the depreciation of a plant and equipment asset. You must calculate the revised depreciation for this asset based on new information.

Do not include the $ sign in your answers.

Your answers must be correct to exactly $2$ decimal places.

Do not include the, indicating thousands in your answers.

Oppong Corporation purchased a building on January $1,2024$ for $$140,400$ with an estimated useful life of $6$ years and estimated sales value at the end of its life of $$50,400.$ Early in January of $2026,$ it was determined that the total estimated useful life on the building should be revised to $8$ years with a revised estimated residual value of $$14,400.$ Oppong Corporation uses the straight$-$line method to calculate depreciation and its year end is December $31.$ Calculate depreciation for $2026.$ For simplicity, assume that the building is depreciated as one unit; it will not be broken down into its parts and depreciated.

Calculate revised depreciation for the year $2026$ using the straight$-$line method.