Question

bought a machine on January 1, 2022. The machine cost $180000 and had an expected salvage value of $26000. The life of the machine was estimated to be 4 years. The depreciation expense using the straight-line method of depreciation is

Answer 1

$38,500

Step-by-step explanation:

The computation of the depreciation expense is shown below:

a) Straight-line method:

= (Original cost - residual value) ÷ (useful life)

= ($180,000 - $26,000) ÷ (4 years)

= ($154,000) ÷ (4 years)

= $38,500

In this method, the depreciation is same for all the remaining useful life

We simply applied the above formula so that the depreciation expense could come