Answer:
Squid Roe should change annual depreciation expense to $9,000 per from year 3 through year 6.
Explanation:
The depreciation expense will have to change from year 3 through year 6 as a result of change from eight years to six years as follows:
Asset cost = $48,000
Depreciation expense for first two years = $6,000 * 2 = $12,000
Net book value after 2 years = Asset cost - Depreciation expense for first two years = $48,000 - $12,000 = $36,000
Remaining years after 2 years = 6 - 2 = 4
New annual depreciation expense = Net book value after 2 years / Remaining years after 2 years = $36,000 / 4 = $9,000
Therefore, Squid Roe should change annual depreciation expense to $9,000 per from year 3 through year 6.
