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Question - In January 2015, Adrian Co. purchased equipment for $850,000 which was estimated to have a useful life of 10 years with a salvage value of $50,000 at the end of that time. Depreciation has been recorded for 5 years on a straight-line basis. In 2020 (year 6), it is determined that the total estimated life should be 8 years with a salvage value of $30,000 at the end of that time.
Required -
A - Calculate the annual depreciation expense for 2020.
B - Will Adrian Co. change its depreciation in the previous (i.e. years 1-5). Explain.
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