Question
on january 1, 2005 UIC Corporation acquired equipment at a cost of $540,000. UIC adopted the sum of the years digits method of depreciation for
on january 1, 2005 UIC Corporation acquired equipment at a cost of $540,000. UIC adopted the sum of the years digits method of depreciation for this equipment and had been recording depreciation over an estimated life of 8 years with a residual value of 5,000. At the beginning of 2008, a decision was made to change to the straight line method of depreciation for this equipment. What is the depreciation expense recorded for 2008?
(Please help me understand where i would plug in the 5,000 of residual value in this problem. i know for regular sum of years digits it would be 540,000 * 8/8+7+6+5+4+3+2+1 = 120,000 for the first year and we do the same for the next 2 years just changing the numerator on top as the years go down. i just dont know where i would plug in the residual value.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started