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Lana71 [14]
3 years ago
8

Bonita Industries purchased a depreciable asset for $174500. The estimated salvage value is $14300, and the estimated useful lif

e is 10 years. The straight-line method will be used for depreciation. What is the depreciation base of this asset?
Business
1 answer:
jok3333 [9.3K]3 years ago
6 0

Answer:

Annual depreciation= $16,020

Explanation:

Giving the following information:

Purchase price= $174,500

Salvage value= $14,300

Useful life= 10 years

T<u>o calculate the depreciable base, we need to use the following formula:</u>

<u></u>

Depreciable base= purchase price - salvage value

Depreciable base= 174,500 - 14,300

Depreciable base= $160,200

N<u>ow, we can determine the annual depreciation:</u>

Annual depreciation= depreciable base /estimated life (years)

Annual depreciation= 160,200 / 10

Annual depreciation= $16,020

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