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Computer equipment was acquired at the beginning of the year at a cost of $65,000 that has an estimated residual value of $3,800 and an estimated useful life of eight years. Determine the
(a) depreciable cost,
(b) straight-line rate, and
(c) annual straight-line depreciation.

Respuesta :

Answer:

(a) $61,200

(b) 12.5%

(c) $7,650

Explanation:

Given information:

Cost = $65,000

Residual value = $3,800

Useful life= 8 years

Now,

(a) Depreciable cost = Cost - Residual value

Depreciable cost = $65,000 - $3,800

Depreciable cost = $61,200

(b) Straight line rate = [tex]\frac{100}{Useful life}[/tex]

Straight line rate = [tex]\frac{100}{8}[/tex]

Straight line rate = 12.5%

(c) Annual straight line depreciation = [tex]\frac{Cost-Residual Value}{Useful life}[/tex]

Annual straight line depreciation = [tex]\frac{65,000 - 3,800}{8}[/tex]

Annual straight line depreciation = [tex]\frac{61,200}{8}[/tex]

Annual straight line depreciation = $7,650

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