Answer:
$213,000
Explanation:
Depreciation is an assignment or allocation of cost to an asset in a systematic manner.
if the asset was purchased on January 1, 2015, for $800,000 with an estimated life of the van was 5 years and the residual value was $90,000
Using straight line method,
Depreciation = ( $800,000 - $90,000)/5
= $710,000/5
= $142,000
As at 1 January 2017 (after 2 years), the book value of the asset which is the cost less accumulated depreciation is
= $800,000 - 2($142,000)
= $516,000
In other words, if the the company revised the total estimated life of the asset from 5 years to 4 years and the estimated residual value remained the same as estimated earlier. Then the asset is to be depreciated for 2 more years.
Depreciation in 2017 = ($516,000 - $90,000)/2
= $426000/2
= $213,000
