Question

question content area depreciation by two methods a storage tank acquired at the beginning of the fiscal year at a cost of $129,600 has an estimated residual value of $7,600 and an estimated useful life of 4 years. a. determine the amount of annual depreciation by the straight-line method.

Answer 1

The straight-line method results in an annual depreciation of $127700.

What does depreciation mean?

Due to usage, deterioration, or obsolescence, an item loses value over time. Depreciation is the measurement for this decline. Depreciation, or the decline in value of an asset, can also result from other factors, such as unfavorable market conditions, etc.

Briefing :

Depreciation expense using the straight-line depreciation method ,

(Actual cost - Salvage Value) / Number of years

=($129600 -$7600) / 4

=$127700

Therefore the amount of annual depreciation is $127700 .

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