Change in Estimate: Depreciation Video Lessons

Concept

# Problem: F Company purchased equipment on January 1 for $82,000. The machines are estimated to have a 5-year life and a salvage value of$4,000. The company uses the straight-line depreciation method. If the original expected life remained the same (i.e., 5-years), but at the beginning of year 4, the salvage value was revised to $8,000, the annual depreciation expense for each of the remaining years would be: a.$5,440. b. $27,200. c.$13,600. d. $14,800. ###### FREE Expert Solution ###### Problem Details F Company purchased equipment on January 1 for$82,000. The machines are estimated to have a 5-year life and a salvage value of $4,000. The company uses the straight-line depreciation method. If the original expected life remained the same (i.e., 5-years), but at the beginning of year 4, the salvage value was revised to$8,000, the annual depreciation expense for each of the remaining years would be:

a. $5,440. b.$27,200.

c. $13,600. d.$14,800.