Question

Oriole Company purchased a new machine on October 1, 2022, at a cost of $68,880. The company estimated that the machine has a salvage value of $5,940. The machine is expected to be used for 48,880 working hours during its 6-year life. Compute the depreciation expense under the straight-line method for 2022 and 2023, assuming a December 31 year-end. (Round answers to 2 decimal places, e.g. 5,275.25.)

Answer 1

Answer above has proper calculations, rounded wrong.

2022: 2,622.5

2023: 10,490

Answer 2

Answer and Explanation:

The computation of the depreciation expense is shown below:-

As we know that

Depreciation expenses = (Machine value - Salvage value) ÷ Estimated useful life of assets

= ($68,880 - $5,940) ÷ 6

= $10,490

Now

Depreciation for 2022 is

= (Depreciation expenses × 3 months ÷ 12 months

= $10,490 × 3 months ÷ 12 months

= $2,623

And Depreciation for 2023 is $10,490