The Donut Stop acquired equipment for $20,000. The company uses straight-line depreciation and estimates a residual...
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The Donut Stop acquired equipment for $20,000. The company uses straight-line depreciation and estimates a residual value of $2,000 and a four-year service life. At the end of the second year, the company estimates that the equipment will be useful for four additional years, for a total service life of six years rather than the original four. At the same time, the company also changed the estimated residual value to $1,000 from the original estimate of $2,000. Required: Calculate how much The Donut Stop should record each year for depreciation in years 3 to 6. Annual depreciation in Years 3 to 6 $ 3,000 The Donut Stop acquired equipment for $20,000. The company uses straight-line depreciation and estimates a residual value of $2,000 and a four-year service life. At the end of the second year, the company estimates that the equipment will be useful for four additional years, for a total service life of six years rather than the original four. At the same time, the company also changed the estimated residual value to $1,000 from the original estimate of $2,000. Required: Calculate how much The Donut Stop should record each year for depreciation in years 3 to 6. Annual depreciation in Years 3 to 6 $ 3,000
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