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Nimfa-mama [501]
3 years ago
8

What will be the depreciation, via the straight line method, if the cost of a plant is $43,250, estimated disposal value is $3,2

50, and the estimated useful life of plant is five years?
Business
1 answer:
Alinara [238K]3 years ago
7 0

Answer:

depreciation expense per year 8,000

Explanation:

<u>The first step,</u> is to calculate the depreciable amount for the asset:

cost - salvage value = amount subject to depreciation

43,250 - 3,250 = 40,000 = depreciable amount

<u>Then,</u> we calculate the depreciation per year:

depreciable amount/ useful life = depreciation per year

40,000/5 = 8,000

In some particular cases, the first year the asset enter the accounting it could be for a period of half the accounting period, so only half-year depreciation is appliedon the first year.

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