Question

A company purchased factory equipment on June 1, 2022 for 167,700. It is estimated that the equipment will have a salvage value of16,500 at the end of its 10-year useful life. Using the straight-line method of depreciation, what is the amount to be recorded as depreciation expense at December 31, 2022?

1) $7,560
2) $15,120
3) $8,820
4) $6,300

Answer 1

The amount recorded as depreciation expense at December 31, 2022 using the straight-line method is $15,120.

al depreciation expense using the straight-line method, we first need to find the depreciable cost of the equipment. This is the initial cost minus the salvage value. In this case, the depreciable cost is $167,700 - $16,500 = $151,200.

Next, we divide the depreciable cost by the useful life of the equipment. The useful life is 10 years. Therefore, the annual depreciation expense is $151,200 ÷ 10 = $15,120.

So, the correct answer is option 2) $15,120.