Answer:
1. $15,450
2. $4,383
Explanation:
1. Computation to determine the machine’s book value at the end of its second year
First step is to calculate the Annual depreciation
Annual depreciation= ($28,150 - $2,750) / 4
Annual depreciation=$25,400/4
Annual depreciation= $6,350
Now let calculate the machine’s book value at the end of its second year
Machine’s book value=$28,150 - ($6,350 *2)
Machine’s book value=$28,150 -$12,700
Machine’s book value=$15,450
Therefore the machine’s book value at the end of its second year will be $15,450
2. Calculation to determine the amount of depreciation for each of the final three years given the revised estimated.
Depreciation for each of the final three years=
($15,450 - $2,300) / 3
Depreciation for each of the final three years=$13,150/3
Depreciation for each of the final three years=
= $4,383
Therefore the amount of depreciation for each of the final three years given the revised estimated will be $4,383
