CFA Level 1: Depreciation Expense Calculation

Depreciation Expense Calculation Using Sum-of-the-Years' Digits Method

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A piece of equipment costs $200,000, has a useful life of 5 years and an estimated salvage value of $50,000. How much depreciation expense should the company recognize in year 4 if it is using the sum-of-the- years' digits method of depreciation?

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