On January 1, 2010, the records of Tuff Turf Corporation (TTC) showed the following regarding production equipment:

On January 1, 2010, the records of Tuff Turf Corporation (TTC) showed the following regarding production equipment:  

Equipment (estimated residual value, $2,200)	$	16,800
Accumulated depreciation (straight-line, one year)		2,920

Required:

Based on the data given, compute the estimated useful life of the equipment. (Round your answer to the nearest whole number.)

 

Estimated useful life

years

 

Explanation:

Depreciation expense per year: = $2,920

Estimated useful life:

($16,800 − $2,200) × 1/? useful life = $2,920 per year

$14,600 / $2,920 = 5 years useful life