Answer:
Option (c) is correct.
Explanation:
Given that,
Asset's book value as on July 1, Year 3 = $70,000
Asset's salvage value = $5,000
Original estimate = $10,000
Depreciation for remaining year 3 (6 months)
:
= [(
Book value - Salvage value) ÷ (useful life - years passed)] × (6÷12)
= [($70,000 - $5,000) ÷ (10 - 2)] × (6÷12)
= ($65,000 ÷ 8) × (6 ÷ 12)
= $8,125 × 0.5
= $4062.5
Workings:
Years passed: as 2 years already passed.
One table is missing from this question, so I attached that table with the answer.