Answered

Looking for answers? Westonci.ca is your go-to Q&A platform, offering quick, trustworthy responses from a community of experts. Our Q&A platform provides quick and trustworthy answers to your questions from experienced professionals in different areas of expertise. Get precise and detailed answers to your questions from a knowledgeable community of experts on our Q&A platform.

First, we will start with annual depreciation. We will always use straight-line depreciation in this course Consider a firm that purchased an equipment for $165,891 and incurred an additional $42,172 for shipping and installation. What will be the annual depreciation expense if the equipment is expected to last 13 years and have a salvage value of $4,018 (using straight-line depreciation)

Sagot :

Shahzaibfaraz

Answer:

Annual Depreciation expense = $15695.7692  rounded off to  $15695.77

Explanation:

We first need to calculate the cost of the equipment. The cost at which an equipment or asset should be recorded should include all the costs incurred to bring the asset into the place and condition necessary for its use as intended by the management. Thus the cost of the equipment will be,

Cost = 165891 + 42172

Cost = $208063

Now we can calculate the depreciation expense per year based on the straight line depreciation method using the following formula,

Annual Depreciation expense = (Cost - Salvage Value) / Estimated useful life

Annual Depreciation expense = (208063 - 4018) / 13

Annual Depreciation expense = $15695.7692  rounded off to  $15695.77

We hope our answers were helpful. Return anytime for more information and answers to any other questions you may have. We hope this was helpful. Please come back whenever you need more information or answers to your queries. Get the answers you need at Westonci.ca. Stay informed by returning for our latest expert advice.