Question

Computer equipment was acquired at the beginning of the year at a cost of $64,311 that has an estimated residual value of $3,310 and an estimated useful life of 6 years. Determine the second-year depreciation using the straight-line method. a. $11,270.17 b. $20,333.67 c. $10,718.50 d. $10,166.83

Answer 1

The second-year depreciation of the computer equipment using the straight-line method is $10,166.83. This is calculated by subtracting the residual value from the cost and dividing the result by the useful life of the equipment, which results in an equal annual depreciation amount. Therefore, the correct option is D.

Step-by-step explanation:

To calculate the second-year depreciation using the straight-line method, you would subtract the estimated residual value from the cost of the asset and then divide the result by the asset's useful life to find the annual depreciation expense:

1. Determine the depreciable base: Cost – Residual value = $64,311 - $3,310 = $61,001.
2. Calculate the annual depreciation expense: Depreciable base ⁄ Useful life = $61,001 ⁄ 6 = $10,166.83.
3. Since the question asks for the second-year depreciation, and straight-line depreciation results in the same amount each year, the second-year depreciation is also $10,166.83.

Therefore, the correct answer is d. $10,166.83.