Echo Enterprises pays $274,900 for equipment that will last five years and have a $41,000 salvage value

Question:

Echo Enterprises pays $274,900 for equipment that will last five years and have a $41,000 . By using the equipment in its operations for five years, the company expects to earn $86,800 annually, after deducting all expenses except depreciation. Prepare a table showing income before depreciation, depreciation expense, and net (pretax) income for each year and for the total five-year period, assuming straight-line depreciation.
Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...