Safarl File Edit View History Bookmarks Window Help Chapter

Safarl File Edit View History Bookmarks Window Help Chapter 9 Hw 9.0.52 points E9-8 Inferring Asset Age from Straight-Line Depreciation [LO 9-3] On January 1, the records of Tasty Treats Corporation (TTC) showed the fllowing regarding production equipment Equipment (estimated residual value, $4,000) $28,000 2,000 Required: Based on the data given, compute the estimated useful life of the equipment. years Hints References eBook& Resources Hint#1 20 6

Solution

STRAIGHT LINE DEPRECIATION

(COST OF THE ASSET- RESIDUAL VALUE)/ESTIMATED USEFU LIFE = DEPRECIATION PER ANNUM

($28,000-$4,000)/ESTIMATED USEFUL LIFE= $2,000

ESTIMATED USEFUL LIFE = $24,000/$2,000

ESTIMATED USEFUL LIFE = 12 YEARS