Accounting for IGCSE & O level - Accounting Procedures (Section 16 - No. 50)
If a company uses the straight-line method and an asset's cost is $10,000, with a salvage value of $1,000 and a useful life of 5 years, what is the annual depreciation expense?
$1,000
$1,800
$2,000
$8,000
Explanation
($10,000 - $1,000) / 5 = $1,800.
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