Question

Could some one please explian how to do this problem thanks :)

A company purchased an air conditioning system for $10,200. The shipping charges on the system were $875, and the set up cost were $1,250,The system is expected to last for five years and has a residual value of $2,000 Using the straight line method to calulate the depreciation for this ac system, what would be annual the depreciation

Answer 1

The annual straight-line depreciation amount would be (1/5) of (net cost - residual value)
= (1/5)(10,200 + 875 + 1250 - 2000)
= ?

Answer 2

thanks :)