Accounting - Revising depreciation straight line method...?

Question

using straight-line depreciation for a machine costing $28,800, with an estimated four-year life and a $2,650 salvage value. At the beginning of the third year, Apex determines that the machine has three more years of remaining useful life, after which it will have an estimated $2,200 salvage value.

whats the book value after 2yrs? whats the depreciation amount for each of the final three yrs given the revised estimates?

Answer 1

Beg. of Yr 1 $28,800

Yr 1 depn ($6,537.50)

Nbv at end of Yr 1 $22,262.50

Yr 2 depn ($6,537.50)

Nbv at end of Yr 2 $15,725

New annual depreciation = ($15,725 - $2,200)/3 = $4,508.33

Nbv at beg. of Yr 3 $15,725

Yr 3 depn ($4,508.33)

Nbv at end of Yr 3 $11,216.67

Yr 4 depn ($4,508.33)

Nbv at end of Yr 4 $15,725

Yr 5 depn ($4,508.34)

Nbv at end of Yr 5 $2,200.00 (the salvage value)

Answer 2

Throw the machine away...salvage sooner, reclaim your taxes and off to Bermuda.