Answer:
Depreciation expenses for 2007 is $8000
Explanation:
Depreciation/year = (Cost - Residual value)/ number of useful life
Depreciation 2007 = ($50,000-$10,000) / 5
= $40,000/5 = $8000
Answer:
$8,000
Explanation:
To calculate depreciation on a straight line method the following formulae will be used:
Asset Cost - Salvage Value/Estimated life of Asset = Depreciation
Also, if the asset was purchased during the year then the depreciation should be on pro-rate basis. However, here the asset was bought on 1st January so it was operational for the whole year.
Calculation as follows:
50,000 - 10,000 = 40,000
40,000 / 5 = 8,000
Hence, depreciation would be $8,000 when calculated on straight-line method for the year 2017.
