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At the beginning of 2012, Mazzaro Company acquired equipment costing $120,000. It was estimated that this equipment would have a useful life of 6 years and a salvage value of $12,000 at that time. The straight-line method of depreciation was considered the most appropriate to use with this type of equipment. Depreciation is to be recorded at the end of each year.
During 2014 (the third year of the equipment"s life), the company"s engineers reconsidered their expectations, and estimated that the equipment"s useful life would probably be 7 years (in total) instead of 6 years. The estimated salvage value was not changed at that time. However, during 2017 the estimated salvage value was reduced to $5,000.
Instructions
Indicate how much depreciation expense should be recorded each year for this equipment, by completing the following table.
Year
Depriciation Expense
Accumulated Depriciation
2012
2013
2014
2015
2016
2017
2018
Treat the statistics from part (a) as if they are population parameters and assume a normal distribution to find the values of the quartiles, Q1, Q2 and Q3.
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