   Chapter 17.I, Problem 2RE ### 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 $88,600$625 $2,500$9,000 7

To determine

To calculate: The total cost, total depreciation and annual depreciation of the asset when the asset purchased cost is $88,600. Explanation Given Information: The cost of the asset is$88,600 and the shipping and the setup charges were $625 and$2,500, respectively. The salvage value of asset is $9,000 and expected to last 7 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$88,600 and the shipping and the setup charges were $625 and$2,500, 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=88,600+625+2,500=\$9

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