Question

Calculate the total cost, total depreciation, and annual depreciation for the following assets by using the straight-line method. Cost Shipping Charges Setup Charge Total Cost Salvage Value Estimated Useful Life (years) Depreciation Total Annual
1. $5,600 $210 $54 ______ $600 6
2. $16,900 $310 0 ______ $1900 4

Answer 1

Answer:

a. For Asset 1, we have:

Total cost = $5,864

Total depreciation = $5,264

Annual depreciation = $877.33

b. For Asset 2, we have:

Total cost = $17,210

Total depreciation = $15,310

Annual depreciation = $3,827.50

Step-by-step explanation:

Note: The data in this question are merged together. They are therefore sorted before answering the question. See the attached pdf for the complete question with the sorted data.

Also note: See the attached excel file for the presentation of the data in the question with the answers (in bold red color).

The explanation of the answers is now given as follow:

Straight line method is a method of calculating depreciation and amortization of an asset by dividing the difference between the total cost and salvage value of an asset by its estimated useful life.

Therefore, wee have:

a. For Asset 1, we have:

Total cost = Cost + Shipping Charges + Setup Charge = $5,600 + $210 + $54 = $5,864

Total depreciation = Total cost - Salvage Value = $5,864.00 = $600 = $5,264

Annual depreciation = Total depreciation / Estimated Useful Life = $5,264 / 6 = $877.33

b. For Asset 2, we have:

Total cost = Cost + Shipping Charges + Setup Charge = $16,900 + $310 + $0 = $17,210

Total depreciation = Total cost - Salvage Value = $17,210 - $1,900 = $15,310

Annual depreciation = Total depreciation / Estimated Useful Life = $15,310 / 4 = $3,827.50

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