Question

Rottino Company purchased a new machine on October 1, 2019, at a cost of $150,000. The company estimated that the machine will have a salvage value of $12,000. The machine is expected to be used for 10,000 working hours during its 5-year life. Compute the depreciation expense under straight-line method for 2019. (Round answer to 0 decimal places, e.g. 2,125.) 2019 Depreciation expense $enter a dollar amount rounded to 0 decimal places

Answer 1

The depreciation expense under straight-line method for 2019 is $6,900

Step-by-step explanation:

In order to calculate the depreciation expense under straight-line method for 2019 we would have to make the following calculation:

Depreciation expenses from 1st October to 31st December 2019= [Depreciation expenses× Number of months machine used / total number of months

Depreciation expenses= Machine cost−Salvage value/useful life

=$150,000-$12,000/5

=$27,600

Depreciation expenses from 1st October to 31st December 2019= $27,600 * 3 monts/12 months

=$6,900

The depreciation expense under straight-line method for 2019 is $6,900