Question

Straight-Line Depreciation A refrigerator used by a wholesale warehouse has a cost of $99,350, an estimated residual value of $5,100, and an estimated useful life of 10 years. What is the amount of the annual depreciation computed by the straight-line method

Answer 1

See below

Step-by-step explanation:

Given the above, straight line method of annual depreciation is

= Cost of purchase - Residual value / Number of useful life

Cost of purchase = $99,350

Residual value = $5,100

Number of useful life = 10

= $99,350 - $5,100 / 10

= $94,250 / 10

= $9,425

Therefore, the amount of annual depreciation computed by the straight line method is $9,425