Question

A corporation purchased manufacturing equipment for $100,000, with an estimated useful life of 10 years and a salvage value of $15,000. The second year’s depreciation for this equipment using the straight line method is _____.

Answer 1

The second year’s depreciation for this equipment using the straight line method is 8,500

Step-by-step explanation:

Depreciation: Depreciation is a decreasing value of the assets due to the tear & wear, obsolescence, usage,etc.

The formula to compute the depreciation under straight lie method is shown below:

=
`((original\ cost - salvage\ value))/(useful\ life)`

=
`= ((\$100,000 - \$15,000))/(10)`

= $8,500

The depreciation amount under straight line method should remain same over the estimated useful life

So, the second year’s depreciation for this equipment is $8,500