A machine costing $54,000 with a 6-year life and $6,000 residual value was purchased January 2, 2005. Compute the yearly depreciation expense using straight-line depreciation. Show all calculations

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A machine costing $54,000 with a 6-year life and $6,000 residual value was purchased January 2, 2005. Compute the yearly depreciation expense using straight-line depreciation. Show all calculations

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Answer:

yearly depreciation expense using straight-line depreciation = $ 8000

Working notes for the above answer is as under

we have been given that,

A machine costing $54,000

with a 6-year life and

residual value was $6,000

depreciation expense using straight-line depreciation

= Cost -salvage value / life years

= 54000 -6000 /6 years

=8000 year

yearly depreciation expense using straight-line depreciation = $ 8000

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