Accounting for IGCSE & O level - Accounting Procedures (Section 13 - No. 33)
A piece of equipment costs $10,000. The estimated useful life is 4 years, and the salvage value is $2,000. Using the straight-line method, what is the depreciation expense for year 1?
$2,000
$2,500
$3,000
$8,000
Explanation
($10,000 - $2,000) / 4 = $2,000. $2,000 is incorrect since this is the answer for year 4. The depreciation expense in year 1 is therefore $2,000
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