Need help The following information is available on a depreciable asset owned by

Question

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The following information is available on a depreciable asset owned by Mutual Savings Bank:

The asset's book value is $57,800 on July 1, Year 3. On that date, management determines that the asset's salvage value should be $5,400 rather than the original estimate of $10,400. Based on this information, the amount of depreciation expense the company should recognize during the last six months of Year 3 would be:

Multiple Choice

A. $1,750.00

B. $4,366.67

C $2,408.33

D. $2,183.33

E. $2,116.37

Purchase date July 1, Year 1 Purchase price $73,600 Salvage value $10,400 Useful life 8 years Depreciation method straight-line

Explanation / Answer

Amount of depreciation expense during the last six months of Year 3 = (57800-5400)/6/12*6= $4366.67 Option B is correct

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