Required information Use the following information for the Exercises below. The

Question

Required information Use the following information for the Exercises below. The following information applies to the questions displayed below. In early January 2017, NewTech purchases computer equipment for $260,000 to use in operating activities for the next four years. It estimates the equipment's salvage value at $28,000. Exercise 10-7 Straight-line depreciation LO P1 Prepare a table showing depreciation and book value for each of the four years assuming straight-line depreciation. Straight-Line Depreciation Annual Depreciation Expense Choose Numerator:I IChoose Denominator: Depreciation expense Year Annual Depreciation 2017 2018 2019 2020 Total Year-End Book Value

Explanation / Answer

Note :

Year 2017 : book Value = Cost - Annual Depreciation

= $ 260,000 - $ 58,000

= $ 202,000

Year 2018 Book Value = $ 202,000 - $ 58,000

Year 2019 Book Value = $ 144,000- $ 58,000

Year 2020 Book Value = $ 86,000- $ 58,000

Choose Numerator / Choose Denominator = Annual Depreciation Expense (Cost - Salvage Value) / Useful Life = Depreciation Expense ( 260,000 - 28,000) / 4 = 58,000

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