Question

carson Company has a piece of machinery that costs $500,000 and is expected to have a useful life of 4 years. Residual value is expected to be $50,000. Using the straight-line method, what is depreciation expense for the first year

Answer 1

Annual depreciation= $112,500

Step-by-step explanation:

Giving the following information:

Carson Company has a piece of machinery that costs $500,000 and is expected to have a useful life of 4 years. The residual value is expected to be $50,000.

To calculate the depreciation expense using the straight-line method, we need to use the following formula:

Annual depreciation= (original cost - salvage value)/estimated life (years)

Annual depreciation= (500,000 - 50,000)/4= $112,500