Chapter 9, Problem 6Q

(a)

To determine

Factors of computing depreciation: For determining the depreciation cost of any asset, three factors are taken into consideration for computing the depreciation, they are;

1. 1. Cost of the depreciable fixed asset
2. 2. Estimated useful life of the fixed asset
3. 3. Salvage value at the end of its useful life

To define: Salvage Value

(b)

To determine

To explain: the use of salvage value in determining the depreciable cost under the straight-line method.