Sargent Corporation bought equipment on January 1, 2014. The equipment cost €360,000 and had an expected residual value of €60,000. The life of the equipment was estimated to be 6 years. The depreciable cost of the equipment is

Question

Quizplus · Accepted Answer

The depreciable cost of the equipment can be calculated using the formula: Depreciable cost = Cost of equipment - Residual value. Therefore, the depreciable cost of the equipment is:

€360,000 - €60,000 = €300,000

This means that the company can depreciate the equipment over the estimated useful life of 6 years at a rate of €50,000 per year.

Sargent Corporation Bought Equipment on January 1, 2014