Respuesta :
The depreciation expense under the straight-line method for 2025 and 2026, assuming December 31 year is $10,080.
Purchase price= $67,560
Salvage value= $7,080
Useful life= 6 years
To calculate the depreciation expense under the straight-line method, we need to use the following formula:
Annual depreciation= [tex]\frac{(original cost - salvage value)}{estimated life }[/tex]
Annual depreciation= [tex]\frac{(67,560 - 7,080)}{6}[/tex]
Annual depreciation= $10,080
2025:
Annual depreciation= (10,080/12)×3= $2,520
2026:
[tex]Annual depreciation= $10,080[/tex]
In accountancy, depreciation is a term that refers to 2 elements of the identical concept: first, the actual lower of the honest cost of an asset, such as the lower fee of factory equipment every yr as its miles used and worn, and 2d, the allocation in accounting statements of the unique cost of the property.
Depreciation is thus the decrease within the price of assets and the method used to reallocate, or "write down" the price of a tangible asset (together with the device) over its beneficial existence span. businesses depreciate lengthy-time period property for both accounting and tax functions. The decrease in the fee of the asset impacts the stability sheet of a commercial enterprise or entity, and the technique of depreciating the asset, accounting-smart, affects the internet earnings, and for that reason the income assertion that they report. generally, the fee is allocated as depreciation cost among the intervals wherein the asset is anticipated for use.
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