Question

If Boeing depreciates its equipment that costs $120,000 over six years, using a straight-line depreciation schedule, at what amount it is reducing its value by each year, assuming there is no residual value? (format as $1,234.56, if there are zero cents format as $1,234.00)

Answer 1

The Boeing equipment with an initial cost of $120,000 depreciated over six years on a straight-line schedule with no residual value will result in an annual depreciation of $20,000.00.

Step-by-step explanation:

If Boeing depreciates its equipment that costs $120,000 over six years on a straight-line depreciation schedule with no residual value, the annual depreciation expense can be calculated by dividing the total cost by the number of years of the useful life of the asset.

To calculate the annual depreciation expense:

1. Determine the initial cost of the equipment, which is $120,000.00.
2. Assume the useful life of the equipment is six years.
3. Divide the initial cost by the useful life to find the annual depreciation expense: $120,000.00 / 6 = $20,000.00.

Therefore, the equipment will depreciate by $20,000.00 each year for six years.