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On October 1, 2021, Dew Company places a new asset into service. The cost of the asset is $80,000 with an estimated eight-year life and $8,000 salvage value at the end of its useful life. What is the depreciation expense for 2022 if Dew Company uses the straight-line method of depreciation

Respuesta :

Samawati

Answer:

$9,000

Explanation:

Under the straight-line method,  the depreciation amount is a constant figure throughout the useful life of an asset.

The depreciable amount is the cost of the asset - salvage value

=$80,000 - $8000

=$72,000

The depreciation amount per year for eight gainful years will

(1/8 x 100) x 72,000

=0.125 x 72,000

=$9,000

The depreciation expense for 2021 will be $9,000