Question

			Calvin's Cropcrushers, Inc.
	On January 5, 2018 Calvin's Cropcrushers, Inc. purchased crop
	crushing equipment for which the following information is available:
	Original cost..................				$3,800,000
	Estimated residual value.......				$200,000
	Useful life in years...........				10	years
	Useful life expressed in operating hours				20,000	hours
	Calculate the following
1	The depreciable base.
2	The annual depreciation using the straight line method.
3	The accumulated depreciation at December 31, 2019 (end of
	second year) if straight line (S/L) depreciation is used.

Answer 1

Answer1 :

Depreciation base = 3,800,000 (-) 200,000 = $ 3,600,000

Answer 2:

Depreciation (as per SLM) = (Cost - salvage value) / Number of years

A	Cost	$ 3,800,000
B	Residual / Salvage Value	$    200,000
C	Number of years	10
(A-B)/C	Depreciation (SLM)	$    360,000

Answer 3:

Year	Value at the beginning	Depreciation every year	Accumulated depreciation	Value at the end
2018	$                   3,800,000	$                         360,000	$                              360,000	$        3,440,000
2019	$                   3,440,000	$                         360,000	$                              720,000	$        3,080,000

In case of any doubt or clarification, feel free to come back via comments.