Ask Question
9 March, 04:43

A company used straight-line depreciation for an item of equipment that cost $15,350, had a salvage value of $3,200 and a six-year useful life. After depreciating the asset for three complete years, the salvage value was reduced to $1,535 but its total useful life remained the same. Determine the amount of depreciation to be charged against the equipment during each of the remaining years of its useful life: Multiple Choice $2,880. $5,672. $1,215. $2,580. $3,200.

+4
Answers (1)
  1. 9 March, 04:53
    0
    The correct answer is $2,580.

    Explanation:

    Under straight-line method, depreciation expense is (cost - residual value) / No of years = ($15,350 - $3,200) / 6 years = $2,025 yearly depreciation expense.

    Accumulated depreciation at Year 3 = $2,025 x 3 = $6,075

    Net book value (NBV) becomes $15,350 - $6,075 = $9,275

    New depreciation is ($9,275 - $1,535) / 3 years = $2,580 yearly depreciation expenses
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “A company used straight-line depreciation for an item of equipment that cost $15,350, had a salvage value of $3,200 and a six-year useful ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers