On july 1, 2019, cullumber company purchased new equipment for $85,000. its estimated useful life was 5 years with a $12,000 salvage value.
on december 31, 2022, the company estimated that the equipment’s remaining useful life was 10 years, with a revised salvage value of $5,000.compute the revised annual depreciation on december 31, 2022.

revised annual depreciation $

$3620

Explanation:

Assuming that the equipment depreciates with straight-line depreciation,

Initial Annual Depreciation = ($85,000 - $12,000)/5 = $14,600/year

NBV of equipment at December 30, 2022 = $85,000 - ($14,600*3) = $41,200

Revised Annual Depreciation = ($41,200 - $5,000)/10 = $3620/year

The standard yearly rate at which depreciation is charged to a fixed asset is called annual depreciation. The computation of the revised annual depreciation is attached below. Kindly go through it.

Unless fixed assets are replaced on a regular basis, annual depreciation causes the stated book values of fixed assets to gradually drop over time.

Therefore, the Revised Annual Depreciation (RAD) is $4,350.

For more information related to the annual depreciation, refer to the link:

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answer; trojan horse;