An item of equipment acquired on January 1 at a cost of $100,000 has an estimated life

Question:

An item of equipment acquired on January 1 at a cost of $100,000 has an estimated life of

10 years.

Required

Assuming that the equipment will have a salvage value of $10,000, determine the depreciation for each of the first three years by the:

a. Straight-line method

b. Declining-balance method

c. Sum-of-the-years’-digits method

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...