Question

Revision of Depreciation Equipment with a cost of $240,000 has an estimated residual value of $18,600, has an estimated useful life of 12 years, and is depreciated by the straight-line method. a. Determine the amount of the annual depreciation. s b. Determine the book value at the end of the tenth year of use. s C. Assuming that at the start of the eleventh year the remaining life is estimated to be four years and the residual value is estimated to be $4,800, determine the depreciation expense for each of the remaining four years. s 10 more Check My Work uses remaining.

Answer 1

Annual dep = (Cost - Salvage value) /Useful life = (240,000-18600)/12 = 18,450
Book value at the end of tenth year = Cost - Accumulated Depreciation for 10 years = 240,000 - (18,450*10) = 55,500
Depreciation expense = (55,500-4,800)/4 = 12,675