Answer:
the revised depreciation is $ 3,753
Explanation:
<em>Straight Line Method of Depreciation charges the same amount of depreciation over the useful life of the asset.</em>
Depreciation Charge (Straight line) = (Cost - Salvage Value) / Useful life
Year 1
Depreciation Charge = ( $58,800 - $3,400) / 9 years
= $6,156
Year 2
Depreciation Charge = $6,156
Year 3
Make the adjustment as if the adjustment happened at the beginning of the year
Make the following changes
(1) Adjast the Depreciable Amount (numerator)
(2) Adjast the Useful life (denominator) to 11 years
Depreciation Charge = (Cost - Previous Depreciation Charges - New Residual Value) / Revised Number of Useful life
Depreciation Charge = ($58,800 - $6,156 - $6,156 - $5,200)/ 11 years
= $ 41,288/ 11 years
= $ 3,753
