Given the following information, calculate the straight-line depreciation of the equipment. Equipment had a cash purchase...
Given the following information, calculate the straight-line depreciation of the equipment. Equipment had a cash purchase price of $50,000; sales tax of $3,000; and installation costs of $1,000. Salvage value is expected to be $2,000. The useful life is expected to be 20 years.
Homework Answers
Total cost of Equipment = 50,000+3,000+1,000 = $54,000
Salvage Value = $2,000
Straight line depreciation (Cost - Salvage Value)/Life
= (54,000-2,000)/20
= $2,600
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