Question

! Required information Use the following information for the Exercises below. (The following information applies to the questions displayed below.) NewTech purchases computer equipment for $274,000 to use in operating activities for the next four years. It estimates the equipment's salvage value at $24,000. Exercise 8-7 Straight-line depreciation LO P1 Prepare a table showing depreciation and book value for each of the four years assuming straight-line depreciation. Straight-Line Depreciation Choose Numerator: 1 Choose Denominator: Annual Depreciation Expense Depreciation expense 0 Year Annual Depreciation Year-End Book Value Year 1 Year 2 Year 3 Year 4 Total $

Answer 1

Answer:

Depreciation Expense under Straight Line Method = ( Cost of the Asset - Salvage Value ) / Useful Life of the Asset

= ($274,000 - $24,000 ) / 4

Depreciation Expense per year  =$62,500

Year	Opening Book Value	Annual Depreciation	Year End Book Value
Year 1	$274,000	$62,500	$211,500
Year 2	$211,500	$62,500	$149,000
Year 3	$149,000	$62,500	$86,500
Year 4	$86,500	$62,500	$24,000
Total		$250,000