A company purchased equipment for the production of medical products at the beginning of a year with an initial investment of $30,000. The useful life is 10 years. Its residual value after 10 years is

A company purchased equipment for the production of medical products at the beginning of a year with an initial investment of $30,000. The useful life is 10 years. Its residual value after 10 years is expected to be 3 The average life method is the simplest annual (30,000-3,000)/10 net value is the initial cost - depreciated

Double-declining-balance method Annual depreciation = 2/10 = 20%

The first year of depreciation = 30,000 × 20% = 6,000

The second year of depreciation = (30,000-6,000) × 20% = 4,800

Third year depreciation = (30,000-6,000-4,800) x 20%

And so on to the eighth year

Remaining two years are averaged under the net - salvage value

Sum-of-years method Depreciation rate in the 12345th year is 10/(1+2+3+...10). .10),9/(1+2+3+. .10),8/(1+2+3+ . .10)... .1/(1+2+3+. .10)

Annual depreciation is 30,000-3,000 respectively x annual depreciation rate