Question

Kansas Enterprises purchased equipment for $81,000 on January 1, 2021. The equipment is expected to have a five-year service life, with a residual value of $7,500 at the end of five years.
Using the straight-line method, depreciation expense for 2021 would be:_________.

Answer 1

Answer:

Depreciation expense for 2021 will be $14700

Explanation:

The straight line method charges a constant depreciation expense each period throughout the useful life of the asset. The depreciation expense per period under the straight line method is calculated as follows,

Depreciation expense = (Cost - Residual value) / Useful life of the asset

Depreciation expense = (81000 - 7500) / 5

Depreciation expense = $14700