Revision of DepreciationEquipment with a cost of $611,800 has an estimated residual value of $55,600, has an estimated useful life of 18 years, and is depreciated by the straight-line method.a.  Determine the amount of the annual depreciation.$b.  Determine the book value after 8 full years of use.$c.  Assuming that at the start of the year 9 the remaining life is estimated to be 13 years and the residual value is estimated to be $57,800, determine the depreciation expense for each of the remaining 13 years.$

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Asked Dec 2, 2019
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Revision of Depreciation

Equipment with a cost of $611,800 has an estimated residual value of $55,600, has an estimated useful life of 18 years, and is depreciated by the straight-line method.

a.  Determine the amount of the annual depreciation.
$

b.  Determine the book value after 8 full years of use.
$

c.  Assuming that at the start of the year 9 the remaining life is estimated to be 13 years and the residual value is estimated to be $57,800, determine the depreciation expense for each of the remaining 13 years.
$

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Expert Answer

Step 1

a.

Determine the amount of the annual depreciation

Annual depreciation = (Equipment cost - Residual value)  Estimated useful life

Annual depreciation = ($611,800 - $55,600) / 18

Annual depreciation = $30,900

Step 2

b.

Determine the book value after 8 full years of use

Book value after 8 full year of use = Equipment cost - (Number of years completed * Depreciation expense)

Book value after 8 full...

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