The following information is available on a depreciable asset owned by Mutual Savings Bank:Purchase dateJuly 1, Year 1Purchase price$85,000Salvage value$10,000Useful life10 yearsDepreciation methodstraight-lineThe asset's book value is $70,000 on July 1, Year 3. On that date, management determines that the asset's salvage value should be $5,000 rather than the original estimate of $10,000. Based on this information, the amount of depreciation expense the company should recognize during the last six months of Year 3 would be:
A. $8,125.00
B. $7,375.00
C. $7,812.50
D. $3,750.00
E. $4,062.50
Answer: E
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