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Straight-Line Depreciation A refrigerator used by a wholesale warehouse has a cost of $64,000, an estimated residual value of $5,200, and an estimated useful life of 12 years. What is the amount of the annual depreciation computed by the straight-line method?

User DavidRH
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1 Answer

2 votes

Answer:

$4,900

Step-by-step explanation:

Cost of refrigerator = $64,000

Estimated residual value = $5,200

Useful life = 12 years

Using the straight line method,

Annual depreciation = ($64,000 - $5,200)/12

= $58,800/12

= $4,900

The difference between the cost and estimated residual value of the asset is the depreciation base of the asset over its useful life.

User Subhash Sharma
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