Computer equipment was acquired at the beginning of the year at a cost of $66,178 that has an estimated residual value of $3,85) and an estimated usetul life of 4 years. Determine the second-year depreciation using the straight-line method. Oa. $15,580.25 Ob. $31,160.50 Oc. $16,544.50 Od. $17,508.75
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Given cost =$66178
Residual value =$3857
Life = 4 years
Method of depreciation= Straight line method
in straight line method of depreciation depreciation will be same every year
Formulae under SLM is
Cost-Scrap/Life
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