P10-4B At the beginning of 2006, Hadaway Company acquired equipment costing $80,000. It
was estimated that this equipment would have a useful life of 6 years and a residual value of
$8,000 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 2008 (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 residual value was not changed at that time. However,
during 2011 the estimated residual value was reduced to $4,000.
Instructions
Indicate how much depreciation expense should be recorded for this equipment each year by
completing the following table.
Year Depreciation Expense Accumulated Depreciation
2006
2007
2008
2009
2010
2011
2012
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