Question

Assuming that at the start of the year 18, the remaining life is estimated to be 31 years and the residual value is estimated to be $67,200, determine the depreciation expense for each of the remaining 31 years.

a) $2,171.61
b) $2,100.00
c) $2,161.29
d) $2,064.52

Answer 1

The depreciation expense for each of the remaining 31 years is $2,161.29.

Step-by-step explanation:

To determine the depreciation expense for each of the remaining 31 years, we need to divide the residual value by the remaining years. In this case, the residual value is $67,200 and the remaining years is 31. So the depreciation expense for each year would be:

Depreciation Expense = Residual Value / Remaining Years

Depreciation Expense = $67,200 / 31

Depreciation Expense = $2,161.29

Therefore, the correct answer is option c) $2,161.29.