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myrzilka [38]
3 years ago
15

Use straight line (SL) depreciation to determine a. annual depreciation charge (5 points) and b. annual book values for the life

of the asset having the price of $1,200,000, depreciable life of 8 years, and the salvage value of $200,000. (10 points)
Business
1 answer:
Andrew [12]3 years ago
4 0

Explanation:

The computation is shown below:

Year            Depreciation                Book value

0                                                      $1,200,000

1                   $125,000                    $1,075,000

2                  $125,000                    $950,000

3                  $125,000                    $825,000

4                  $125,000                    $700,000

5                  $125,000                    $575,000

6                  $125,000                    $450,000

7                  $125,000                     $325,000

8                  $125,000                     $200,000

The depreciation expense is

= ($1,200,000 - $200,000) ÷ (8 years)

= $125,000

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