Question

A restaurant purchased kitchen equipment on Jan 1, 2016 for $40,000. It is estimated that the equipment will have a $4,000 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31

Answer 1

Answer:

$3,600

Explanation:

Asset was purchased on 1 January

Cost of Kitchen Equipment  = $40,000

Salvage value = $4,000

Useful years = 10 years

Annual depreciation = ($40,000 - $4,000)/10

                                  = $36,000/10

                                  = $3,600

Depreciation to be recognized by December 31 is $3,600