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Dear Fatou. We received a comment from one of the auditors regarding our depreciation of the new industrial soda machine that we purchased for $100,000
Dear Fatou. We received a comment from one of the auditors regarding our depreciation of the new industrial soda machine that we purchased for $100,000 on January 1, 2018. Our original estimate was that the machine has a $15,000 residual value and a useful life of 10 years. We use straight-line method to record depreciation. However, on January 1, 2020 (.e. after 2 years), we realize that the machine has a remaining useful life of 7 years and a new residual value is $13,000. A depreciation schedule would show depreciation expense for 2020. Sincerely, Kristen Winston COO | Blue Mountain Soda Factory O $8,500 $10,000 O $11,850 O $14,000 Respond
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