Question

Mitchell Corporation bought equipment on January 1, 2017. The equipment cost $300,000 and had an expected salvage value of $50,000. The life of the equipment was estimated to be 6 years. The depreciable cost of the equipment is

Answer 1

$250,000

Step-by-step explanation:

The depreciable cost of the equipment is the amount that will be used to provide for depreciation on the asset also known as Depreciable Amount.

Depreciable Cost = Cost - Salvage Value

therefore,

Depreciable Cost = $300,000 - $50,000 = $250,000