Question

Depreciate Example: Assume the firm owns a machine that costs $12,000 and is expected to last three years, with no salvage value. The annual entry to record depreciation is _______.

Answer 1

The annual entry to record depreciation for a machine that costs $12,000 and is expected to last three years, with no salvage value, is $4,000.

Step-by-step explanation:

The annual entry to record depreciation is $12,000 divided by the expected useful life of the machine, which is three years. Without any salvage value, the entire cost of the machine is expensed over its useful life. Therefore, the annual entry to record depreciation is $4,000 ($12,000 / 3 years).