Question

Cardinal Industries purchased a generator that cost $11,000. It has an estimated life of five years and a residual value of $1,000. It is estimated to be good for 5,000 hours. If depreciation is computed for the first full year using the straight-line method of depreciation, which information is needed for the calculation?
$11,000 cost, five-year life, and $1,000 salvage value

Answer 1

Answer:

$11,000 cost, five-year life, and $1,000 salvage value

Explanation:

given data

cost = $11,000

residual value = $1,000

estimated to be good = 5,000 hour

solution

as per the straight-line method

formula to compute the depreciation expense that is express as

depreciation expense = (Purchase value of generator - residual value) ÷ (estimated useful life)   .......................1

and

here by considering here these three item

and other information that is not relevant that ignore

depreciation expense = ($11,000 - $1,000) ÷  5 years = 2000

so $11,000 cost, five-year life, and $1,000 salvage value