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Aledo Manufacturing utilizes a calendar year as its fiscal year and depreciates plant assets using the...

Aledo Manufacturing utilizes a calendar year as its fiscal year and depreciates plant assets using the straight-line method. On January 2nd, 2010, the company purchased a semi-truck for $215,000 with a useful life of ten years and an estimated salvage value of $23,000. On January 1st, 2015, the company decided to extend the useful life to twelve years while decreasing the estimated salvage value to $21,000. What amount of depreciation expense did Aledo record for the year ended December 31st, 2015?

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Answer #1
Cost of Semi-truck $2,15,000
Less:Salvage value $23,000
Depreciable value of semi-truck $1,92,000
Deprecciation expenses as per old method $19,200
Book value as on Jan 1,2015[$215,000-($19,200*5)] $1,19,000
Remaining useful life(12 years - 5 years) 7 Years
Depreciable value of semi-truck as on Jan 1,2015 $98,000
Deprecciation expenses as per new method $14,000
So Depreciation charged on 2015 is $14,000
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