Question

using the straight line method. what is the depreciation expense for a computer that costs 4,500, has a residual value of 700, and has a life of 4 years?

Answer 1

So over 4 years, this computer's value will go from 4,500 to 700.

That's a difference of 3,800 over 4 years. Straight-line means the amount is the same every year, so


`(3,800)/(4)` = 950

So the depreciation expense each year is 950.