Beam Corp buys a new software for inventory management at $50,000 and estimates its useful life 10 years

Finance Oct 27, 2020

Beam Corp buys a new software for inventory management at $50,000 and estimates its useful life 10 years. Which of the following statement is correct? *

Each year’s depreciation is $10,000

Each year’s amortization is $5,000

Each year’s depletion is $5,000

Each year’s depreciation is $5,000

Expert Solution

As per the Straight line method

Amortization = Depriciable Value - salvage value / Life of the asset

= 50,000 - 0 / 10

= 5000

Each years amortization is $5000

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