Humphrey Contractors Purchased Customized Equipment in January, 2017 for $620,000

Multiple Choice

Humphrey Contractors purchased customized equipment in January, 2017 for $620,000. The manufacturer warranted the equipment for six years. Humphrey used double-declining balance depreciation with a useful life of eight years and no salvage value. After two full years, he now believes that the equipment will only last a total of five years. Compute his depreciation expense for 2019 if he switches to straight-line depreciation. (Round any intermediate calculations to the nearest cent and your final answer to the nearest dollar.)

A) $77,500
B) $93,000
C) $116,250
D) $124,000