Answer:
Annual depreciation= $16,020
Explanation:
Giving the following information:
Purchase price= $174,500
Salvage value= $14,300
Useful life= 10 years
To calculate the depreciable base, we need to use the following formula:
Depreciable base= purchase price - salvage value
Depreciable base= 174,500 - 14,300
Depreciable base= $160,200
Now, we can determine the annual depreciation:
Annual depreciation= depreciable base /estimated life (years)
Annual depreciation= 160,200 / 10
Annual depreciation= $16,020
