Depreciation by Straight Line Method
Not what you're looking for?
1 have trouble figuring out theses two problems dealing with depreciated by straight line method.
1) Equipment cost of $120,000 has a estimated residual value of $10,000 and a estimated life of 5yrs or 12,000hrs. It is to be depreciated by the straight line method. What is the amount of depreciation for the first full year during which the equipment was used 3,000 hours?
2)Equipment cost of $50,000 has a estimated residual value of $8,000 and a estimated life of 12yrs was depreciated by the straight line method for 5yrs. Due to obsolescence, it was determined that the useful life should be shortened by 5yrs and residule value canged to zero. The depreciation expense for the current and future years is?
Purchase this Solution
Solution Summary
The solution explains the process of calculating the depreciation for an equipment. It also explains how to recalculate the depreciation of the initial estimate is changed
Solution Preview
1. Under straight line method, depreciation is calculated as (Cost - Salvage Value)/Useful life. It is given that cost = 120,000, salvage value = 10,000 and useful life is 5 years
Straight line depreciation = (120,000-10,000)/5 = 110,000/5 = $22,000 per year.
The depreciation amount will be ...
Purchase this Solution
Free BrainMass Quizzes
Situational Leadership
This quiz will help you better understand Situational Leadership and its theories.
Understanding the Accounting Equation
These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce
SWOT
This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.
Lean your Process
This quiz will help you understand the basic concepts of Lean.