Computer equipment was acquired at the beginning of the year at a cost of $56,000 that has an estimated residual value of $3,000 and an estimated useful life of 5 years. Determine the 2nd year’s depreciation using straight-line depreciation
Straight line deprication is always the same. (I hate double declining balance)
(56000 - 3000)/5 = ??? per year
Got it?
To determine the 2nd year’s depreciation using straight-line depreciation, we need to know the formula for straight-line depreciation.
The formula for straight-line depreciation is:
Depreciation Expense = (Cost - Residual Value) / Useful Life
In this case:
Cost = $56,000
Residual Value = $3,000
Useful Life = 5 years
Now we can calculate the depreciation expense:
Depreciation Expense = ($56,000 - $3,000) / 5
Depreciation Expense = $53,000 / 5
Depreciation Expense = $10,600
Therefore, the 2nd year's depreciation using straight-line depreciation is $10,600.