Baxter Co purchased an asset for $1,600,000 on 1.1.X1. It had an estimated useful life of 5 years and it was depreciated using the straight line method. On 1.1.X3 Baxter Co revised the remaining estimated useful life to 8 years
What is the carrying amount of the asset at 31.12.X3?
SUGGESTED SOLUTIONS:
| YEAR | COST | ANNUAL DEPRECIATION | CARRYING AMOUNT |
| X1 | 1,600,000 | 320,000 | 1,280,000 |
| X2 | 1,280,000 | 320,000 | 960,000 |
| X3 | 960,000 | 120,000 | 840,000 |
WORKING : Annual depreciation using straight line after changing the useful life
=960,000 / 8
=120,000