A company purchased a piece of equipment costing $125,000 and is depreciating it assuming a 10-year life. The residual value was originally expected to be $10,000. At the end of the fifth year, the motor was replaced (a major overhaul) at a cost of $40,000. The overhaul increased the efficiency of the equipment. How much is depreciation expense in the sixth year assuming straight-line depreciation, no change in estimated useful life and no change in residual value?
? 19,500
? 21,500
None of the above.
? 18,500
? 11,500