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Social ScienceRevision 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 $57,800, determine the depreciation expense for each of the remaining 13 years.$
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.
$
Expert Answer
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
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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