Under the straight-line method, we base the annual depreciation charge on the depreciable amount and the estimated useful life of the asset. The depreciable amount is the cost of the asset minus its estimated salvage value: Regal Company Depreciation Charge: Straight-line method Cost = (A) $107,200 Minus: Salvage Value = (B) -$4,800 Depreciable Amount = (C ) = (A) - (B) $102,400 Useful Life in Years = (D) 8 Annual Depreciation = (C ) / (D) $12,800 2009 Depreciation Charge $12,800

Under the straight-line method, we base the annual depreciation charge on the depreciable amount and the estimated useful life of the asset. The depreciable amount is the cost of the asset minus its estimated salvage value: Regal Company Depreciation Charge: Straight-line method Cost = (A) $107,200 Minus: Salvage Value = (B) -$4,800 Depreciable Amount = (C ) = (A) - (B) $102,400 Useful Life in Years = (D) 8 Annual Depreciation = (C ) / (D) $12,800 2009 Depreciation Charge $12,800

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 6MC: At the end of the expected useful life of a depreciable asset with an estimated 15% residual value,...

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Regal Company
Depreciation Charge: Straight-line method
Cost = (A)	$107,200
Minus: Salvage Value = (B)	-$4,800
Depreciable Amount = (C ) = (A) - (B)	$102,400
Useful Life in Years = (D)	8
Annual Depreciation = (C ) / (D)	$12,800
2009 Depreciation Charge	$12,800

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