[Solved] straight-line method of depreciation

Depreciation is allocation of an asset’s depreciable amount over its useful life. Under the straight-line method of depreciation, the depreciable amount is uniformly allocated of the asset over its useful life.

Question

An equipment acquired at the beginning of the year at a cost of $340,000 has an estimated residual value of $45,000 and an estimated useful life of 10 years. Determine the following.

(a)	The depreciable cost	$
(b)	The straight-line rate		%
(c)	The annual straight-line depreciation	$

Round your answer for the straight-line rate to one decimal place, if necessary.

Expert Answer

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a. Depreciable Costs

 

Cost of equipment	$340,000
Less: Residual Value	$45,000
Depreciable amount	$295,000

2. Straight line line rate….