1 How much straight line depreciation would you take in year

1. How much straight line depreciation would you take in year 1 for a SUV used in your business. Purchased January 1, 2016. Cost is $45,000, estimated life is 5 yrs with salvage value of $5,000.

Solution

Straight line = (original cost-Salvage value)/Useful life

= (45000-5000)/8

Straight line = 5000 per year

So straight line depreciation would take in year 1 is $5000