   Chapter 17.I, Problem 1RE ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

#### Solutions

Chapter
Section ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

# Note: Round answers to the nearest cent when necessary.Calculate the total cost, total depreciation, and annual depreciation for the following assets by using the straight-line method. Cost Shipping Charges Setup Charges Total Cost Salvage Value Estimated Useful Life (years) Total Depreciation Annual Depreciation $45,000$150 $500$45.650 $3,500 10$42,150 $4,215.00 To determine To calculate: The total cost, total depreciation and annual depreciation of the asset when the asset purchased cost is$45,000.

Explanation

Given Information:

The cost of the asset is $45,000 and the shipping and the setup charges were$150 and $500, respectively. The salvage value of asset is$3,500 and expected to last 10 years.

Formula used:

The steps to calculate annual depreciation by straight line method are as follows:

Step 1: Calculate the total cost.

Step 2: Calculate the total amount of depreciation by subtracting salvage value from the total cost.

Step 3: Calculate the annual depreciation by dividing estimated useful life from the total amount of depreciation

Calculation:

Consider the provided cost of asset is $45,000 and the shipping and the setup charges were$150 and $500, respectively. The total cost of the asset is: Total cost=Cost of asset+Shipping cost+Setup cost Now, using the above formula, the total cost of the asset is: Total cost=45,000+150+500=$45,650

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