Baxter Co purchased an asset for $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 | 600,000 | 120,000 | 480,000 |
| X2 | 480,000 | 120,000 | 360,000 |
| X3 | 360,000 | 45,000 | 315,000 |
WORKING : Annual depreciation using straight line after changing the useful life
=360,000 / 8
=45,000