Computer equipment was acquired at the beginning of the year at a cost of $72,700. It...

Computer equipment was acquired at the beginning of the year at a cost of $72,700. It had an estimated residual value of $3,500 and an estimated useful life of 5 years.

A. Determine the depreciable cost

B. Determine the straight-line rate

C. Determine the annual straight-line depreciation

Solutions

Expert Solution

a.	The depreciable cost	=	$ 69,200
b.	The Straight line rate	=	20%
c.	Annual Depreciation	=	$ 13,840

	Workings:
	The depreciable cost	=	(Cost - Residual value)
		=	($72700 - $3500)
		=	$ 69,200

	The Straight line rate	=	1 / useful life
		=	1/5
		=	20%

	Depreciation for the year	=	$69200 X 20%
		=	$ 13,840

ekkarill92 answered 1 year ago

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