Reference no: EM133115265

Question 1 - Change in depreciable life and salvage (residual) value - Thomson Corp. acquired computer equipment on January 1, 2006 for $10,000,000. The computer equipment has an estimated useful life of 6 years and $1,000,000 estimated salvage (residual) value. The firm uses the straight line depreciation method. On January 1, 2008, the firm discovered that the new technologies make it likely that the computer equipment will last only 4 years in total and that the estimated salvage (residual) value will be only $600,000.

Required - Compute the amount of depreciation expense for 2008 after this change in depreciable value and salvage (residual) value. Assume that the change does not represent an impairment loss.

Question 2 - Sale of PPE - Eastman Kodak reported that the cost of its PPE on December 31, 2010 was $6,805 million. On January 1, 2010, it had been $7,327 million. Also, the balance of accumulated depreciation on December 31, 2010 was $5,254 million. On January 1, 2010, it had been $5,516 million. Depreciation expense for the fiscal year 2010 was $420 million. During 2010, the company bought new equipment with acquisition cost of $254 million worth. The company also sold PPE and reported a $14 million gain on selling PPE.

Required - How much did Kodak sell its PPE for (sale price)?