The question is: A fitness club uses straight-line depreciation for a machine costing 26,400, with an estimated four year life and a 2,900 salvage value. At the beginning of the third year, the club determines that the machine has three more years of remaining useful life, after which it will have an estimated 2,050 salvage value. Compute 1) the machine's book value at the end of its second year and 2) the amount of depreciation for each of the final three years given then revised estimates.

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We will work through this problem with you if you will attempt it on your own so we can check your work. We can do this in steps. Do you know how to compute straight-line depreciation? Why don't you try to compute the first 2 years (has to be done to do part 1) of your question, and we'll go from there? Thanks.