Equipment costing $83000 with a salvage value of $15000 and an estimated life of 8 years has been depreciated using the straight-line method for 2 years. Assuming a revised estimated total life of 5 years and no change in the salvage value, the depreciation expense for year 3 would be O $17000. $10200. O $14200. O $22000.

Equipment costing $83000 with a salvage value of $15000 and an estimated life of 8 years has been depreciated using the straight-line method for 2 years. Assuming a revised estimated total life of 5 years and no change in the salvage value, the depreciation expense for year 3 would be O $17000. $10200. O $14200. O $22000.

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Description: Equipment costing $83000 with a salvage value of $15000 and an estimated life of 8 years has been depreciated using the straight-linemethod for 2 years. Assuming a revised estimated total life of 5 years and no change in the salvage value, the depre

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

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Equipment costing $83000 with a salvage value of $15000 and an estimated life of 8 years has been depreciated using the straight-line
method for 2 years. Assuming a revised estimated total life of 5 years and no change in the salvage value, the depreciation expense for
year 3 would be
$17000.
$10200.
$14200.
$22000.

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