On January 1, 2020, the Vasquez SA ledger shows Equipment 32,000 and Accumulated DepreciationEquipment 9,000. The depreciation resulted from using the straightline method with a useful life of 10 years and a residual value of 2,000. On this date, the company concludes that the equipment has a remaining useful life of only 4 years with the same residual value. Compute the revised annual depreciation.

1) Compute the revised depreciation.

a. Same facts as (1), except assume that Vasquez will use the declining-balance method for the remaining four years, at 50%. What will be the annual depreciation expense for 2020 and 2021?

b. At the end of the useful life, what will be the book value of the equipment if the straight-line method is used?