Answer:
Annual depreciation= $5,660
Explanation:
Giving the following information:
Purchase price= $25,740
Salvage value= $3,100
<u>First, we need to calculate the accumulated depreciation before the change in useful life:</u>
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (25,740 - 3,100) / 8
Annual depreciation= $2,830
Accumulated depreciation= 2,830*4= $11,320
<u>Now, we can calculate the new depreciation expense:</u>
<u></u>
Annual depreciation= (25,740 - 11,320 - 3,100) / 2
Annual depreciation= $5,660
