Nanki Corporation Purchased Equipment on 1/1/07 for $650,000

Multiple Choice

Nanki Corporation purchased equipment on 1/1/07 for $650,000. In 2007 and 2008, Nanki depreciated the asset on a straight-line basis with an estimated useful life of 8 years and a $10,000 residual value. In 2009, due to changes in technology, Nanki revised the useful life to a total of six years with no residual value. What depreciation would Nanki record for the year 2009 on this equipment?

A) $108,333.
B) $106,667.
C) $122,500.
D) None of these is correct.The depreciation for 2007 and 2008 was 2 [($650,000 10,000) 8] = $160,000.This leaves a book value of $490,000 .