Answer:
$9,450
Explanation:
In straight line depreciation the Depreciable value (Cost of asset - Salvage value of asset) is expensed over useful life of the asset. Each year same value of expense is charged.
When the salvage value is revised the value of depreciation will also be revised.
First we will calculate the Book value at the beginning of year 4.
Depreciable value = $45,000 - $9,000 = $36,000
Depreciation per year = $36,000 / 5 years = $7,200 per year
Book Value at start of year 4 = $45,000 - ($7,200 x 3 ) = $23,400
after revision of salvage value:
Depreciable value at start of year 4 = $23,400 - $4,500 = $18,900
Numbers of year remaining = 5 - 3 = 2 years
Depreciation each year = $18,900 / 2 = $9,450
