Caterpillars, Inc, a manufacturing company, acquired equipment on January 1, 2014 for $600,000
Estimated useful life of the equipment was seven years and the estimated residual value was $18,000. On January 1, 2017, after using the equipment for three years, the total estimated useful life has been revised to nine total years. Residual value remains unchanged. The company uses the straight-line method of depreciation. Calculate depreciation expense for 2017. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
A) $57,143
B) $55,429
C) $66,667
D) $64,667
B .Straight-line depreciation = (Cost - Residual value) / Useful life
Straight-line depreciation = (600,000 - 18,000 ) / 7 = 83,142.86
Depreciation provided for first three years = 83,142.86 x 3 = $249,428.58
Revised depreciation for the remaining useful life = ($600,000 - $249,428.58 - $18,000 ) / 6 = $55,429
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