In January 2006, Concepts Solution a Lawn Care and Landscaping Company purchased a Skid Loader that cost $48,000. Concepts Solution estimated that the equipment would last for 5 years and have a salvage value of $2,000 at the end of 2010. The company uses straight-line method of depreciation. Analyze each of the following independent scenarios.
1. Before the depreciation expense is recorded for 2008 Concepts Solution discovers that at the end of 2010 the Skid Loader will only have a salvage value of $500 instead of $2,000.
2. Before the depreciation expense is recorded for 2008 Concepts Solution decided that the Skid Loader will only last until the end of 2009. It's estimated that the value of the system will only be worth $2,000.
3. Before the depreciation expense is recorded for 2008 Concepts Solution decided that the Skid Loader will last until the end of 2010 but it will only be worth $1,000.
4. Before the depreciation expense is recorded for the year 2008 Concepts Solution decides to add upgrades to the Skid Loader which will extend its useful life to 2014. The upgrades cost 4,000 and the estimated useful life would be "0"
Required:
Calculate the amount of depreciation expense that Concepts Solution would report on its income statement for the year ended December 31, 2008, for the Skid Loader, under each scenario.