Problem in depreciation question important, question, maintain, replace, company

islandgyrl

Guys how to solve this question
Destruction Ltd purchased a machine for 80,000.The machine useful life is 8 years and salvage value is 8000. In order to maintain the machine , company will have to replace one its important components every 3 years.The component cost is 6000…
Given that the company replaced the part at end of the 3rd year, amount of depreciation in 4th year will be closest to if it does not use component method
a) 9000
b) 11000
c)12000

neil1234

its B =11000

JonnyKay

If you do not use the component method you can depreciate the total cost of the equipment. So your depreciation expense every year would be 80 000-8000/8= 9000. Your component has a 3 year lifespan, so you have 6000/3=2000. When you add both it gives you 11 000.
Using the component method, you would need to reduce the amount of the component from your total asset value. Your depreciation expense would be 80 000-6000-8000/8=8250. When you deprciate your component you would have 6000/3=2000.  Add both gives you 10,250.
Correct me if I am wrong

PalacioHill

u r correct