a newconnect.mheducation.com Textbook Solutions I Chegg.com Nankd am 8-10 PM Sav

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a newconnect.mheducation.com Textbook Solutions I Chegg.com Nankd am 8-10 PM Saved Nanki Corporation purchased equipment on January 1, 2014, for $655,000 In 2014 and 2015, Nanki depreciated the asset on a straight-line basis with an estimated useful life of eight years and a $7,000 residual value. In 2016, due to changes in technology, Nanki revised the useful life to a total of 4 years with no residual value. What depreciation would Nanki record for the year 2016 on this equipment? (Round your answer to the 1nearest dollar amount.) Multiple Choice $108,917 $108,000 $246,500 None of these answer choices are correct. FI F4 FS F6 F7 FS

Explanation / Answer

Solution: Option D

Working:

Depreciation each year = 655,000 - 7000 / 8 = 81,000

Depreciation for 2014 and 2015 = 2years * 81,000 = 162,000

BV = 655,000 - 162,000 = 493,000

Revised life is 4 years = 493,000 / 4year = 123,250

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