Accounting Estimate
Depreciation expense = $80,000 - $5,000 = $15,000/yr
5 years
- After 2 years you decide the total life should’ve been 10 years and the salvage should now be $2,000. Remaining book value (amount to be depreciated) equals:
$80,000 - (2 x $15,000) = $50,000
Revised depreciation expense = $50,000 - $2,000 = $6,000
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