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9 September, 03:16

Falcon Company purchased a depreciable asset for $125,000. The estimated salvage value is $10,000, and the estimated useful life is 10 years. The straight-line method will be used for depreciation. What is the depreciation base of this asset?

a. $11,500

b. $12,500

c. $115,000

d. $125,000

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Answers (1)
  1. 9 September, 03:36
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    c. $115,000

    Explanation:

    Given;

    Cost of asset = $125,000

    Salvage value = $10,000

    Useful life = 10 years

    Method of depreciation is straight line

    Depreciation base = Cost - Salvage value

    = $125,000 - $10,000

    = $115,000

    The depreciation base which is the total charge to depreciation from the beginning period to the end period of the asset is $115,000.
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