Chapter 9, Problem 9.2APE

(a)

To determine

Straight-line Depreciation: Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below:

$\text{Depreciation cost = }\frac{\left(\text{Cost of the asset}-\text{Residual value}\right)}{\text{Estimated useful life of the asset}}$

the depreciable cost of the equipment.

(b)

To determine

the straight-line rate.

(c)

To determine

the annual straight-line depreciation.