A clinic purchases an CT machine for 300000 Using straight l

A clinic purchases an CT- machine for $300,000. Using straight line depreciation method, what is the annual depreciation expense that we would record each year on this equipment. Assume the equipment has a useful life of 8 years and a salvage value of 25% at the end of 8 years. Please show all calculations.

Solution

salvage value=$300,000*25%=$75000

Hence annual depreciation expense=(Cost-salvage value)/Total useful life

=($300,000-$75000)/8

which is equal to

=28125.