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loris [4]
2 years ago
6

Sesame Company purchased a computer system for $74,000 on January 1, 2018. It was depreciated based on a 7-year life and an $18,

000 residual value. On January 1, 2020, Sesame revised these estimates to a total useful life of 4 years and a residual value of $10,000. Sesame's depreciation expense for 2020 equal to:
Mathematics
1 answer:
amm18122 years ago
7 0

Answer: $24000

Step-by-step explanation:

Depreciation for 2018 = ($74,000 - $18000) / 7

= $56000/7

= $8000

Depreciation for 2019 = ($74,000 - $18000) / 7

= $56000/7

= $8000

Depreciation up to 2019 = $8000 + $8000 = $16000

Book value at end of 2019 = $74000 - $16000 = $58000

Revised residual value = $10,000

Number of remaining years = 4-2 = 2 years

Depreciation expensed for 2020 will be:

= ($58000 - $10,000) / 2

= $48000/2

= $24000

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