An electrical substation is acquired at a cost of $258,000. Its useful life is expected to be 10 years and at the end of this period a scrap value equivalent to 10% of its original cost is estimated. Determine the depreciation basis by applying the sum of digits method.

 

An electrical substation is acquired at a cost of $258,000. Its useful life is expected to be 10 years and at the end of this period a scrap value equivalent to 10% of its original cost is estimated.

Determine the depreciation basis by applying the sum of digits method.

Answer rating: 100% (QA)

To determine the depreciation basis using the sum of digits method we need to calculate the sum of the digits for the useful life of the electrical su... View the full answer