Question

A corporation purchased manufacturing equipment for $100,000, with an estimated useful life of 10 years and a salvage value of $15,000. The second year’s depreciation for this equipment using the straight line method is _____.

Answer 1

Answer:

The second year’s depreciation for this equipment using the straight line method is 8,500

Explanation:

Depreciation: Depreciation is a decreasing value of the assets due to the tear & wear, obsolescence, usage,etc.

The formula to compute the depreciation under straight lie method is shown below:

= $\dfrac{(original\ cost - salvage\ value)}{useful\ life}$

= $= \dfrac{(\ 100,000 - \ 15,000)}{10}$

= $8,500

The depreciation amount under straight line method should remain same over the estimated useful life

So, the second year’s depreciation for this equipment is $8,500