Mike Corporation purchased equipment on January 1, 2010 by paying cash of $68,000. The equipment has an estimated residual value of 4,000 and an expected useful life of 8 years. At the beginning of 2016, Sadler concluded that the total useful life of the equipment will be 12 years rather than 8, and that the residual value will be $2,000. Mike uses the straight-line method for depreciation.

What is the balance in accumulated depreciation at December 31, 2015, for this asset?

Select one:

a. $48,000

b. $59,500

c. $51,000

d. $40,000

e. $56,000

What will be recorded as depreciation expense for 2016?

Select one:

a. $1,667

b. $3,333

c. $1,500

d. $3,667

e. $3,000