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11 February, 16:36

Super Saver Groceries purchased store equipment for $40,000. Super Saver estimates that at the end of its 10-year service life, the equipment will be worth $3,000. During the 10-year period, the company expects to use the equipment for a total of 10,000 hours. Super Saver used the equipment for 1,200 hours the first year. Required: Calculate depreciation expense of the equipment for the first year, using each of the following methods. (Do not round your intermediate calculations.) rev: 04_08_2019_QC_CS-164618 1. Straight-line.

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  1. 11 February, 20:03
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    Annual depreciation = $3,700

    Explanation:

    Giving the following information:

    Super Saver Groceries purchased store equipment for $40,000. Super Saver estimates that at the end of its 10-year service life, the equipment will be worth $3,000.

    To calculate the depreciation expense under the straight-line method, we need to use the following formula:

    Annual depreciation = (original cost - salvage value) / estimated life (years)

    Annual depreciation = (40,000 - 3,000) / 10 = $3,700
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