Question

On November 1, 2016, Blossom Company places a new asset into service. The cost of the asset is $73000 with an estimated 10-year life and $11000 salvage value at the end of its useful life. What is the depreciation expense for 2017 if Blossom Company uses the straight-line method of depreciation

Answer 1

$6,200

Step-by-step explanation:

Using the straight-line method of depreciation, the depreciation expense is the same for each year during the estimated 10-year life of the asset. The yearly depreciation is given by:

`D = (73,000-11,000)/(10)\\D= \$6,200`

Blossom Company has a depreciation expense for 2017 of $6,200.