Asked by Ashley Pillatos on Jul 06, 2024
Verified
A copy machine acquired on May 1 with a cost of $2,545 has an estimated useful life of three years. Assuming that it will have a residual value of $445, determine the depreciation for the first and second year by the straight-line method. Round your answers to the nearest whole dollar.
Straight-Line Method
A method of calculating depreciation by spreading the cost of an asset evenly over its useful life.
Residual Value
The estimated value of an asset at the end of its useful life.
Depreciation
The method of distributing the expense of a physical asset throughout its life span.
- Determine depreciable cost and compute depreciation expense through different methodologies, including straight-line, double-declining balance, and units of activity.
Verified Answer
AW
Ashlee WarrenJul 13, 2024
Final Answer :
Straight-Line Depreciation = (Cost - Estimated Residual Value) ÷ Estimated Life
Straight-Line Depreciation = ($2,545 - $445) ÷ 3
Straight-Line Depreciation = $700 per year?First Year = $467
($700 × 8/12)Second Year = $700
Straight-Line Depreciation = ($2,545 - $445) ÷ 3
Straight-Line Depreciation = $700 per year?First Year = $467
($700 × 8/12)Second Year = $700
Learning Objectives
- Determine depreciable cost and compute depreciation expense through different methodologies, including straight-line, double-declining balance, and units of activity.
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