Equipment with a cost of $225,000 has an estimated salvage value of $15,000 and an estimated life of 4 years or 10,000 hours. it is to be depreciated by the straight-line method. what is the amount of depreciation for the first full year, during which the equipment was used 2,700 hours?

The depreciation is $52,500

Explanation:

The formula to compute the depreciation under the straight-line method is shown below:

=

=

= $52,500

Under the straight-line method, the depreciation expense should be the same for the remaining useful life. Life of the equipment or machine should always be expressed in years, not in hours.

So, these usage of hours should be ignored.

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.