Answer:
Annual depreciation= $28,000
Explanation:
Giving the following information:
Purchase price= $170,000
Salvage value= $30,000
Useful life= 5 years
To calculate the annual depreciation, we need to use the following formula:
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (170,000 - 30,000) / 5
Annual depreciation= $28,000
Under the straight-line method, the annual depreciation is constant.
