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5 August, 03:14

Compute the depreciation expense for the year ended December 31, 2021. Indigo elected to depreciate the building on a straight-line basis and determined that the asset has a useful life of 30 years and a salvage value of $750,000.

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  1. 5 August, 04:19
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    Incomplete question because the cost value of the asset in question is unknown

    Explanation:

    This question is incomplete.

    However to calculate depreciation rate using the straight line basis, the formula below can be applied.

    Depreciation rate = Cost - scrap value / estimated useful life.

    Lets take this as an example:

    Assuming the cost of the building is $3,000,000 and the salvage value is $750,000 with an estimated useful life of 30 years.

    The depreciation rate will be calculated as

    $3,000,000 - $750,000 / 30

    $2,250, 000 / 30 = $75,000

    Depreciation rate = $75,000
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Home » Business » Compute the depreciation expense for the year ended December 31, 2021. Indigo elected to depreciate the building on a straight-line basis and determined that the asset has a useful life of 30 years and a salvage value of $750,000.
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