Question Completion:
It is also estimated that the equipment will produce 100,000 units over its 5-year life.
Compute depreciation expense for 2016 using the straight-line method of depreciation.
Answer:
Trouble Company
The Depreciation Expense for 2016 is:
$11,000
Step-by-step explanation:
a) Data and Calculations:
Cost of equipment = $60,000
Purchase date = January 1, 2016
Estimated Salvage value = $5,000
Estimated useful life = 5 years
Depreciable amount = $55,000 ($60,000 - $5,000)
Depreciation rate per year under the straight-line method = $55,000/5
= $11,000
Under the straight-line depreciation method, Trouble Company will continue to deduct $11,000 as the depreciation expense on the equipment until the end of its useful life or any other preceding event affecting the equipment.