Hawk Company Purchased an Asset on January 1, 2014, for $10,000

Essay

Hawk Company purchased an asset on January 1, 2014, for $10,000. The asset was expected to have a ten-year life and a $1,000 salvage value. The company uses the straight-line method of depreciation. On January 1, 2016, the company made a major repair to the asset of $5,000, extending its life. The asset is expected to last ten years from January 1, 2016. Calculate the amount of depreciation for 2016.