Computer equipment was acquired at the beginning of the year at a cost of $58,808 that...

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Computer equipment was acquired at the beginning of the year at a cost of $58,808 that...

Computer equipment was acquired at the beginning of the year at a cost of $58,808 that has an estimated residual value of $3,552 and an estimated useful life of 7 years. Determine the second-year depreciation using the straight-line method.

a.$15,787.43

b.$7,893.71

c.$8,908.57

d.$8,401.14

business accounting

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Answer 1

Answer #1

Option (b) is correct

Under the straight line method, depreciation is calculated by the following formula:

Depreciation = Cost - Residual value / Useful life

Cost = $58808, Residual value = $3552, useful life = 7

Depreciation = ($58808 - $3552) / 7 = $7893.71

Under straight line method, depreciation remains the same for every year. So depreciation for second year will be same i.e. $7893.71.

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Answer 2

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