Question

 

In early January 2017, NewTech purchases computer equipment for $268,000 to use in operating activities for the next four years. It estimates the equipment’s salvage value at $30,000.

Prepare a table showing depreciation and book value for each of the four years assuming straight-line depreciation.

	Straight-Line Depreciation   Choose Numerator: / Choose Denominator: = Annual Depreciation Expense   Beginning book value/Cost/Cost minus salvage (choose one) / Double the SL rate/ Estimated useful life (years)/ Total units of production (choose one) = Depreciation expense     /   =   Year Annual Depreciation   Year-End Book Value   2017       2018       2019       2020       Total $

Answer 1

Choose Numerator	/	Choose Denominator:	=	Annual Depreciation Expense
Cost minus salvage	/	Estimated useful life (years)	=	Depreciation expense
($268,000 - $30,000)	/	4 Years	=	$59,500
$238,000	/	4 Years	=	$59,500

Year	Annual Depreciation	Year-End Book Value
2017	59,500	208,500
2018	59,500	149,000
2019	59,500	89,500
2020	59,500	30,000
Total	238,000