Hope for the Homeless purchased kitchen equipment for $47,000 with a residual value of $17,000 and a life expectancy of 5 years. Using straight-line depreciation, the amount of the depreciation adjustment for the first year would be

Question

Quizplus · Accepted Answer

The straight-line depreciation method calculates depreciation by subtracting the residual value from the cost and then dividing by the useful life. Here, ($47,000 - $17,000) / 5 = $6,000 per year.

Hope for the Homeless Purchased Kitchen Equipment for $47,000 with a Residual