Question

On January 1, 2022, the Sheridan Company ledger shows Equipment $48,400 and Accumulated Depreciation $17,960. The depreciation resulted from using the straight-line method with a useful life of 10 years and a salvage value of $3,500. On this date, the company concludes that the equipment has a remaining useful life of only 2 years with the same salvage value. Compute the revised annual depreciation. The revised annual depreciation $enter the revised annual depreciation in dollars

Answer 1

Answer:

$13,470

Explanation:

Cost = $48,400

Accumulated Depreciation = $17,960

Salvage Value = $3500

Useful Life =  2 Years

Book Value = Cost - Accumulated Depreciation

= $48,400 - $17,960

= $30,440

Revised Annual Depreciation = (Book Value - Salvage Value) / Useful Life

= ($30,400 - $3,500) / 2

= $13,470

Hence the revised annual depreciation will be $13,470 annually.

Answer 2

The revised annual depreciation will be $13,470 annually.

Given data

Cost = $48,400

Accumulated Depreciation = $17,960

Salvage Value = $3500

Useful Life =  2 Years

What is the Book Value?

= Cost - Accumulated Depreciation

= $48,400 - $17,960

= $30,440

What is the Revised Annual Depreciation?

= (Book Value - Salvage Value) / Useful Life

= ($30,400 - $3,500) / 2

= $13,470

Therefore, the revised annual depreciation will be $13,470 annually.

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