Falcon Company purchased a depreciable asset for $125,000. The estimated salvage value is $10,000, and the estimated useful life is 10 years. The straight-line method will be used for depreciation. What is the depreciation base of this asset?

Question

Quizplus · Accepted Answer

The depreciation base is simply the cost of the asset minus its estimated salvage value. Therefore, the depreciation base of this asset is $125,000 - $10,000 = $115,000.

Falcon Company Purchased a Depreciable Asset for $125,000