• Boeing purchases new aircraft for $100,000,000 with an expected useful life of 20 years and a residual value of $10,000,000. Calculating the annual depreciation expense using the straight-line method involves dividing the depreciable amount by the useful life. This process adheres to the principles of:
  • Money Measurement: Economic events should be measured in monetary terms.
  • Going Concern: Assumes that a company will continue to operate indefinitely.

Item	Amount ($)
Cost of Aircraft	$100,000,000
Residual Value	-$10,000,000
Depreciable Amount	$90,000,000
Useful Life (years)	20
Annual Depreciation	$4,500,000