Question

Tina Cole is a certified financial adviser. She purchased equipment for her office for $8,843. The trade-in value of the equipment is estimated to be $450 after 7 years of use. Using the straight-line method, what is the annual depreciation to the nearest cent?

Answer 1

Straight - line method allows the determination of the annual depreciation by dividing the total reduction in property value by the number of years. In the given above, The total depreciation of the value is $8,393. Dividing this value by 7 years gives $1,199/year. 

Therefore, the annual depreciation is $1,199.0

Answer 2

Answer:

$1,199 per year.

Step-by-step explanation:

Tina Cole is a certified financial adviser.

She purchased equipment for her office costs = $8,843

After 7 years of use the trade-in value of the equipment is estimated = $450

Total depreciation in 7 years = 8,843 - 450 = $8,393

We have to calculate the annual depreciation using the straight-line method.

So we divide $8,393 by 7

$8,393 ÷ 7 = $1,199

The annual depreciation of the equipment is $1,199 per year.