Question

Becker Office Service purchased a new computer system in Year 1 for $35,000. It is expected to have a five-year useful life and a $3,800 salvage value. The company expects to use the system more extensively in the early years of its life. Requireda. Calculate the depreciation expense for each of the five years, assuming the use of straight-line depreciation.

Answer 1

Answer:

Under straight line depreciation, the depreciation expense per year for every year will be $6240

Explanation:

The straight line depreciation charges a constant depreciation expense per year through out the useful life of the asset regardless of how it is used over the useful life. The formula for straight line depreciation expense per year is,

Depreciation expense per year = (Cost - Salvage Value) / estimated useful life

Depreciation expense per year = (35000 - 3800) / 5  =  $6240