A machine bought for N35,000 was estimated to have a life span of 5 years with a scrap value of N9,000. If the scrap value is presently N15,000, what will b...
Question 1 Report
A machine bought for N35,000 was estimated to have a life span of 5 years with a scrap value of N9,000.
If the scrap value is presently N15,000, what will be the yearly depreciation using the straight line method?
Answer Details
The straight-line method is a commonly used depreciation method for accounting purposes. It assumes that an asset loses an equal amount of its value each year over its useful life.
To calculate the yearly depreciation using the straight-line method, you need to subtract the scrap value from the original cost and then divide by the useful life of the machine.
Original Cost of the Machine = N35,000
Scrap Value = N15,000
Useful Life = 5 years
Depreciable Cost = Original Cost - Scrap Value
Depreciable Cost = N35,000 - N15,000
Depreciable Cost = N20,000
Yearly Depreciation = Depreciable Cost / Useful Life
Yearly Depreciation = N20,000 / 5
Yearly Depreciation = N4,000
Therefore, the yearly depreciation using the straight-line method for this machine is N4,000. is the correct answer.
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