A company used straight-line depreciation for an item of equipment that cost $12,000, had a salvage value of $2,000 and a five-year useful life. After depreciating the asset for three complete years, the salvage value was reduced to $1,200 but its total useful life remained the same. Determine the amount of depreciation to be charged against the equipment during each of the remaining years of its useful life:
A) $1,000
B) $1,800
C) $5,400
D) $2,400
E) $2,000
D) $2,400
Explanation: Accumulated Depreciation through the end of year 3:
(Cost of Asset - Salvage Value)/Estimated Useful Life * Years Elapsed
($12,000 - $2,000)/5 * 3 = $6,000
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