Question

A machine costing $56,745 with a 7-year life and $51,208 depreciable cost was purchased January 1. Compute the yearly depreciation expense using straight-line depreciation. Round your answer to the nearest whole dollar.

How much is per year?

Answer 1

$7315

Explanation:

To find the depreciation expense, we use this formula:

Depreciable cost ÷ useful life time

Depreciated cost = $51,208

Life time = 7 years

51,208 ÷ 7 = 7315.42857

This means that $51,208 were lost over the 7 years, meaning $7315 were lost every year.