engage CengageNOWv2| OnlirMerchancise inventory s c + Revision of Depreciation E
ID: 2522510 • Letter: E
Question
engage CengageNOWv2| OnlirMerchancise inventory s c + Revision of Depreciation Equipment with a cost of $895,000 has an estimated residual value of $103) method. 000, has an estimated useful life of 45 years, and is depredated by the straight- line a. Determine the amount of the annual depreciation. b. Determine the book value after 20 full years of use. c. Assuming that at the start of the year 21 the remaining life is estimated to be 32 years and the residual value is estimated to be $91,800, determine the depreciation expense for each of the remaining 32 years.Explanation / Answer
a) Annual depreciation = (895000-103000)/45 = 17600 per year
b) Book value after 20 years = 895000-(17600*20) = 543000
c) Revised annual depreciation = (895000-352000-91800)/32 = 14100 per year
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