A computer workstation cost $28,000, has an expected life of 7 years, and an expected salvage value of $7,000. Depreciation expense using the straight-line method will be $3,000 per year.

Question

Quizplus · Accepted Answer

Straight-line depreciation is calculated by dividing the depreciable cost (original cost minus salvage value) by the useful life in years. In this case, the depreciable cost is $28,000 - $7,000 = $21,000, and the useful life is 7 years. Therefore, the annual depreciation expense is $21,000 ÷ 7 = $3,000, which matches the given information.

A Computer Workstation Cost $28,000, Has an Expected Life of 7