We are told the equipment costs $45,000, has a residual value of $5,000, and four years of useful life. In Straight Line Depreciation, the amount for each year is the same no matter the year in its useful life.
Yearly Depreciation = (Cost - Residual Value) ÷ (Number of years of useful life)
= (45000 - 5000) ÷ 4
= 40000 ÷ 4
= 10000
Thus, the company's equipment depreciates $10,000 each year until the end of its useful life.
