Question

On january 1, ace electronics bought a new cash register for $2,500. Ace plans to use the cash register for 4 years and then sell is for $200. If Ace uses straight-line depreciation expense for the 1st year ended December 31 equals________

Answer 1

Depreciation expense = $575

Step-by-step explanation:

According to International Accounting standards(IAS) 16 property plan and equipment (PPE), the cost of an asset is the purchase cost plus other costs of bringing it to the intended working conditions.

Annual depreciation = (Cost - Scrap Value)/ Number of years

Cost of asset = 2500

Scrap value - 200

Estimated useful life = 4

Annual depreciation = (2500 - 200)/4 = 575

Depreciation expense = $575