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Rainwater Harvester uses straight-line depreciation for its solar panel costing $45,000, with an estimated five-year life and a $5,000 salvage value. At the beginning of its third year, the company determines that the solar panel has four more years of remaining useful life, after which it will have an estimated $1,000 salvage value.
1. Compute depreciation for the solar panel for each of the first two years of its useful life.
2. Compute book value of the solar panel at the end of its second year.
3. Compute depreciation for the solar panel for each of the final four years given the revised estimates.
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