Question

a factory machine was purchased for $ 60,331 on may 1st. it was estimated that it would have an $ 3,797 salvage value at the end of its 12-year useful life. rounding to the nearest one dollar, what is the depreciation expense recorded in year one using straight-line depreciation?

Answer 1

The depreciation expense recorded in year one for the machine, using straight-line depreciation, is $4,711 after rounding to the nearest dollar.

Step-by-step explanation:

The depreciation expense for the first year using straight-line depreciation can be calculated using the formula:

Depreciation Expense = (Cost of Asset - Salvage Value) / Useful Life

The cost of the machine is $60,331, and the salvage value is $3,797. The useful life of the machine is 12 years. Applying the formula gives us:

Depreciation Expense = (60,331 - 3,797) / 12 = 56,534 / 12 = $4,711

Rounded to the nearest dollar, the depreciation expense recorded in year one is $4,711. It's important to spread the cost of the asset evenly over its useful life, which is the principle behind straight-line depreciation.