XYZ Corporation purchased a machine at the beginning of 2005 for $250,000. The machine was being depreciated using the straight-line method over an estimated life of 25 years, with a $40,000 salvage value. At the beginning of 2015, the company paid $60,000 to overhaul the machine. As a result of this improvement, the company estimated that the useful life of the machine would be extended an additional 6 years, and the salvage value would be reduced to $30,000. Compute the depreciation charge for 2015.

XYZ Corporation purchased a machine at the beginning of 2005 for $250,000. The machine was being depreciated using the straight-line method over an estimated life of 25 years, with a $40,000 salvage value. At the beginning of 2015, the company paid $60,000 to overhaul the machine. As a result of this improvement, the company estimated that the useful life of the machine would be extended an additional 6 years, and the salvage value would be reduced to $30,000. Compute the depreciation charge for 2015.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 13P

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