Answer:
option (d) 2400
Explanation:
Data provided in the question:
Initial book value = $12,000
Salvage value = $2000
Useful life = 5 years
Thus,
Using the straight line method of depreciation
Annual depreciation = [Cost - Salvage value] ÷ Useful life
= [ $12,000 - $2,000 ] ÷ 5
= $2,000
Accumulated Depreciation for 3 years
= Annual depreciation × Time
= $2,000 × 3
= $6,000
Book value after 3 years = Cost - Accumulated depreciation
= $12,000 - $6,000
= $6,000
Remaining useful life = 2 years
Reduced Salvage value after 3 years = $1,200
Therefore,
Depreciable value of the Asset = Book value - Reduced salvage value
= $6,000 - $1,200
= $4,800
Revised depreciation to be charged every year
= Depreciable value of the Asset ÷ (Remaining useful life)
= $4,800 ÷ 2
= $2,400
Hence,
The correct answer is option (d) 2400
