Question

MacGyver Company bought equipment on January 3, 20X1, for $34,100. At the time of purchase, the equipment was estimated to have a useful life of 6 years and a salvage value of $620. Using the straight-line method, the amount of one year's depreciation is

Answer 1

$5,580

Step-by-step explanation:

Straight line method charges a fixed amount of depreciation for each and every year the asset is in use in the business.

Depreciation expense = (Cost - Salvage Amount) ÷ Estimated useful life

therefore,

Depreciation expense = ($34,100 - $620) ÷ 6

= $5,580

Using the straight-line method, the amount of one year's depreciation is $5,580.