Answer:
Annual depreciation= $9,800
Explanation:
<u>First, we need to calculate the depreciation expense and accumulated depreciation until 2016:</u>
<u></u>
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (60,000 - 6,000) / 5
Annual depreciation= $10,800
Accumulated depreciation= 10,800*2= $21,600
<u>Now, we determine the depreciable value and the revised depreciation expense:</u>
<u></u>
Depreciable value= 60,000 - 21,600= 38,400
Annual depreciation= (38,400 - 9,000) / 3
Annual depreciation= $9,800
