Computing Depreciation Expense for Change in Useful Life Phelps Company purchases equipment on January 1 of Year 1 , for $36,000 which will be depreciated using the sum-of-years:-digits method. The equipment has a residual value of $6,000 and a useful life of three years. On January 1 of Year 2, Phelps decides that the machine has an original total useful life of four years (instead of three years) and $3,000 residual value. What is depreciation expense for Year 2? Depreciation expense for Year 2:\$