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Question
Nadir Company purchased a milling machine on January 3, 2003 for $55,000. The machine was being depreciated on the straight-line method over an estimated useful life of 10 years, with $5,000 salvage value. At the beginning of 2011, the company paid $15,000 to overhaul the machine. As a result of this expenditure, the company estimated that the remaining useful life of the machine was now 8 years with no salvage value.
Required:
What should be the depreciation expense recorded for this machine in 2011 and what is the asset's December 31, 2011 book value?
Answer
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