Calculating Depreciation Expense for Equipment in 2024

Explanation:

Depreciation Expense Calculation:

The equipment was purchased on 01/01/22 for $200 with a salvage value of $20,000 and a useful life of 10 years, using straight-line depreciation method.

The annual depreciation expense can be calculated using the formula:

Depreciation Expense = (Initial Cost - Salvage Value) / Useful Life

Given data:

Initial Cost = $200

Salvage Value = $20,000

Useful Life = 10 years

Calculate the annual depreciation expense:

Depreciation Expense = ($200 - $20,000) / 10 = $2,000

If the useful life is changed to 6 years and salvage value to $0 in 2024, then the new annual depreciation expense for 2024 would be:

Depreciation Expense = ($200 - $0) / 6 = $33.33

Therefore, the depreciation expense for 2024 would be $33.33.

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