Exercise 8-13 Revising depreciation LO C2

Apex Fitness Club uses straightline depreciation for a machine costing $22,600, with an estimated four year life and a $2,600 salvage value. At the beginning of the third year, Apex determines that the machine has three more years of remaining useful life, after which it will have an estimated $2,150 salvage value.

Required: 1. Compute the machines book value at the end of its second year.Compute the machines book value at the end of its second year.

Required 1

Required 2

Book Value at the End of Year 2:
Cost
Accumulated depreciation 2 years
Book value at point of revision

2. Compute the amount of depreciation for each of the final three years given the revised estimates.