From the following facts, complete a depreciation schedule using thee straight - line
cost of Highlander- $30,000
residual value- $6,000
estimated life- 8 years
To create a depreciation schedule using the straight-line method, we need to calculate the annual depreciation expense for each year of the estimated life of the asset. The formula for straight-line depreciation is:
Annual Depreciation Expense = (Cost - Residual Value) / Useful Life
Given the following facts:
Cost of Highlander: $30,000
Residual Value: $6,000
Estimated Life: 8 years
Let's calculate the annual depreciation expense for each year:
Year 1:
Annual Depreciation Expense = ($30,000 - $6,000) / 8
Annual Depreciation Expense = $24,000 / 8
Annual Depreciation Expense = $3,000
Year 2:
Annual Depreciation Expense = ($30,000 - $6,000) / 8
Annual Depreciation Expense = $24,000 / 8
Annual Depreciation Expense = $3,000
Year 3:
Annual Depreciation Expense = ($30,000 - $6,000) / 8
Annual Depreciation Expense = $24,000 / 8
Annual Depreciation Expense = $3,000
Year 4:
Annual Depreciation Expense = ($30,000 - $6,000) / 8
Annual Depreciation Expense = $24,000 / 8
Annual Depreciation Expense = $3,000
Year 5:
Annual Depreciation Expense = ($30,000 - $6,000) / 8
Annual Depreciation Expense = $24,000 / 8
Annual Depreciation Expense = $3,000
Year 6:
Annual Depreciation Expense = ($30,000 - $6,000) / 8
Annual Depreciation Expense = $24,000 / 8
Annual Depreciation Expense = $3,000
Year 7:
Annual Depreciation Expense = ($30,000 - $6,000) / 8
Annual Depreciation Expense = $24,000 / 8
Annual Depreciation Expense = $3,000
Year 8:
Annual Depreciation Expense = ($30,000 - $6,000) / 8
Annual Depreciation Expense = $24,000 / 8
Annual Depreciation Expense = $3,000
Now, using this information, you can create a depreciation schedule that shows the year and the corresponding annual depreciation expense.