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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Straight-line depreciation rates

Convert each of the following estimates of useful life to a straight-line depreciation rate, stated as a percentage: (a) 10 years, (b) 8 years, (c) 25 years, (d) 40 years, (e) 5 years, (f) 4 years, (g) 20 years.

To determine

Straight-line Depreciation: Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below:

Depreciation cost = (Cost of the assetResidual value)Estimated useful life of the asset

To convert: each of the given estimated useful life into straight-line depreciation rate as a percentage.

Explanation

Convert each of the given estimated useful life into straight-line depreciation rate as a percentage.

Convert estimated useful life into straight-line depreciation rate.
Formula Straight-linerate =100%Estimatedusefullife
Serial Number Estimated Useful life Straight-line rate
(a) 10 years =100%10Years=10%
(b) 8 years =100%8Years=12

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