Answer:
The depreciation expense for 2020 is $215,100
Explanation:
Given
Claxton Company purchased a van on January 1, 2018, for $820,000.
Useful life = 5 years
Residual value = $103,000
Annual depreciation = ($820,000- $103,000)/5
= $717,000/5
= $143,400
At the beginning of 2020, the asset would have been depreciated for 2 years (2018 and 2019)
Net book value = $820,000 - 2($143,400)
= $533,200
Since the residual value remains the same after a revision of the estimated useful life from 5 years to 4 years
The asset would only have 2 years left for depreciation.
Annual depreciation = ($533,200 - $103,000)/2
= $430,200/2
= $215,100
