Chapter 9, Problem 9.5APE

(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 salvage value is shown as below:

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

the amount of annual depreciation

(b)

To determine

the book value at the end of the tenth year of use.

(c)

To determine

the revised annual depreciation