Calculating the First Year Depreciation Expense for Equipment

Explanation:

Straight-line depreciation method:
The straight-line depreciation method allocates an equal amount of depreciation expense each year over the useful life of the asset.

To calculate the annual depreciation expense for the equipment in question, we use the following formula:

Annual Depreciation Expense = (Cost of the Equipment - Residual Value) ÷ Estimated Useful Life

Given data:
Cost of the Equipment = $160,000
Residual Value = $10,000
Estimated Useful Life = 5 years

Substitute the values into the formula:
Annual Depreciation Expense = ($160,000 - $10,000) ÷ 5 years
Annual Depreciation Expense = $150,000 ÷ 5
Annual Depreciation Expense = $30,000

Therefore, the amount of depreciation for the first full year using the straight-line method is $30,000. The number of hours the equipment was used (3,300 hours) does not impact this calculation.