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silver inc. purchased equipment for $510,000 which was estimated to have a useful life of 10 years with a salvage value of $10,000 at the end of that time. depreciation has been recorded for 7 years on a straight-line basis. in 2020 (year 8), it is determined that the total estimated life should be 15 years with a salvage value of $5,000 at the end of that time. calculate the depreciation expense for 2020.

Answer :

The depreciation expense for 2020 will be $350000. A fixed asset's share that has been deemed consumed in the current period is subject to depreciation expense.

A credit is applied to the cumulative depreciation expense, a counter asset account that balances the fixed assets (asset) account, when an entry is made to the depreciation cost account. Throughout the course of a fiscal year, the amount in the depreciation expenditure account rises; at year's end, it is flushed out and reset to zero. In the next fiscal year, the account is then utilized once more to store depreciation costs. The linked expenditure account for intangible assets is known as amortization expense, and it is utilized in the same way.

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