LO 6 Exercise 8-15A Revision of estimated useful life On January 1, 2011, Harris Machining Co. purchased a compressor and related installation equipment for $64,000. The equipment had a three-year estimated life with a $4,000 salvage value. Straight-line depreciation was used. At the beginning of 2013, Harris revised the expected life of the asset to four years rather than three years. The salvage value was revised to $3,000. Required Compute the depreciation expense for each of the four years. Accounting for Long-Term Operational Assets 427

LO 6 Exercise 8-15A Revision of estimated useful life On January 1, 2011, Harris Machining Co. purchased a compressor and related installation equipment for $64,000. The equipment had a three-year estimated life with a $4,000 salvage value. Straight-line depreciation was used. At the beginning of 2013, Harris revised the expected life of the asset to four years rather than three years. The salvage value was revised to $3,000. Required Compute the depreciation expense for each of the four years. Accounting for Long-Term Operational Assets 427

Name: LO 6Exercise 8-15A Revision of estimated useful lifeOn January 1, 201
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Description: LO 6Exercise 8-15A Revision of estimated useful lifeOn January 1, 2011, Harris Machining Co. purchased a compressor and related installationequipment for $64,000. The equipment had a three-year estimated life with a $4,000 salvagevalue. Straight-lin

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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QS 8-10 (Algo) Computing revised depreciation LO C2 On January 1, the Matthews Band pays $66,800 for sound equipment. The band estimates it will use this equipment for four years and after four years it can sell the equipment for $1,000. Matthews Band uses straight-line depreciation but realizes at the start of the second year that this equipment will last only a total of three years. The salvage value is not changed. Compute the revised depreciation for both the second and third years.
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