Kansas Enterprises purchased equipment for $76,000 on January 1, 2021. The equipment is expected to have a ten-year service life, with a residual value of $7,200 at the end of ten years. Using the straight-line method, depreciation expense for 2021 would be:

The depreciation expense for 2021 would be: $6,880

Explanation:

Straight line method charges a fixed depreciation charge over the life of asset.

Depreciation Charge = (Cost - Residual Value) / Number of Estimated Useful life

= ($76,000 - $7,200) / 10

= $6,880

The amount of depreciation is charged at fixed amount of $6,880 for each of the years that this asset is in use in the business.

Conclusion:

The depreciation expense for 2021 would be: $6,880