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On January 1, Year 1, Li Company purchased an asset that cost $25,000. The asset had an expected useful life of five years and an

On January 1, Year 1, Li Company purchased an asset that cost $25,000. The asset had an expected useful life of five years and an estimated salvage value of $5,000. Li uses the straight-line method for the recognition of depreciation expense. At the beginning of the fourth year, the company revised its estimated salvage value to $2,500. What is the amount of depreciation expense to be recognized during Year 4?

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  • $6,500

  • $10,500

  • $5,250

  • $4,000

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