Question

On June 30​, 2017​, Austin Sound Center purchased a copy machine for $ 50 comma 000. Austin Sound Center expects the machine to last for four years and to have a residual value of $ 2 comma 000. Compute depreciation expense on the machine for the year ended December​ 31, 2017​, using the​ straight-line method. Begin by selecting the formula to calculate the​ company's depreciation expense on the machine for the year ended December​ 31, 2017. Then enter the amounts and calculate the depreciation expense.

Answer 1

Depreciation charge is $6,000

Step-by-step explanation:

The depreciation charge using straight line method of depreciation can be computed using the below formula:

depreciation charge=cost -salvage value/useful life

cost is $50,000

salvage value is the same as residual value which is worth of the asset after useful life is $2,000

useful life is the number of years the asset is expected to e put into use which is 4 years

depreciation charge=($50,000-$2,000)/4=$12,000 per year

The depreciation for the year ended 31 st December 2017 is a six month depreciation amount,hence the depreciation amount is $6,000($12,000*6/12)