On January 2, Year 1, Collins Company purchased equipment costing $43,200. The equipment has an estimated salvage value of $6,120 and an estimated useful life of 20 years.
Collins Company uses straight-line depreciation. During Year 4, new information suggests that the equipment will have a total useful life of 9 years and a revised salvage value of $5,760.
Required:
1. Compute depreciation expense for Year 4.
2. Compute the book value of the equipment at the end of Year 4.