Reference no: EM132487978

The following information is available on a depreciable asset owned by Mutual Savings Bank:

Purchase date July 1, Year 1

Purchase price  $105,700

Salvage value     $11,100

Useful life: 11 years

Depreciation method: straight-line

Question 1: The asset's book value is $88,500 on July 1, Year 3. On that date, management determines that the asset's salvage value should be $6,100 rather than the original estimate of $11,100. Based on this information, the amount of depreciation expense the company should recognize during the last six months of Year 3 would be:

Multiple Choice

Option 1: $2,458.33

Option 2: $2,288.89

Option 3: $1,980.56

Option 4: $2,221.93

Option 5: $4,577.78