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18 October, 15:32

A company used straight-line depreciation for an item of equipment that cost $16,950, had a salvage value of $4,200 and a six-year useful life. after depreciating the asset for three complete years, the salvage value was reduced to $1,695 but its total useful life remained the same. determine the amount of depreciation to be charged against the equipment during each of the remaining years of its useful life:

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  1. 18 October, 18:48
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    Depreciation = (equipment cost-salvage value) / useful life

    Depreciation = (16,950-4,200) : 6

    =2,125 per year

    Book value after 3 years

    =16,950-2,125*3

    =10,575

    Now find the amount of depreciation to be charged against the equipment during each of the remaining years of its useful life

    Depreciation = (equipment cost-salvage value) / useful life

    Depreciation = (10,575-1,695) : 3

    =2,960
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