Using the straight-line method, if a company buys a computer for $2,000 with a useful life of 4 years and a salvage value of $200, what is the annual depreciation?

Practice Questions

1 question

$450
$450.00
$500
$600

Questions & Step-by-step Solutions

1 item

Q: Using the straight-line method, if a company buys a computer for $2,000 with a useful life of 4 years and a salvage value of $200, what is the annual depreciation?

Solution: Annual Depreciation = (Cost - Salvage Value) / Useful Life = ($2,000 - $200) / 4 = $450.

Steps: 5

Step 1: Identify the cost of the computer, which is $2,000.
Step 2: Identify the salvage value of the computer, which is $200.
Step 3: Identify the useful life of the computer, which is 4 years.
Step 4: Calculate the depreciable amount by subtracting the salvage value from the cost: $2,000 - $200 = $1,800.
Step 5: Divide the depreciable amount by the useful life to find the annual depreciation: $1,800 / 4 = $450.

Using the straight-line method, if a company buys a computer for $2,000 with a useful life of 4 years and a salvage value of $200, what is the annual depreciation?

Practice Questions

Questions & Step-by-step Solutions

Related Questions

On a scale of 0–10, how likely are you to recommend The Soulshift Academy?