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29 August, 08:43

1. Albacore Corporation purchased a new machine costing $27,600 on January 1, 2017. The machine is expected to have a $1,800 salvage value at the end of its useful life of six years. What is the depreciation expense that Albacore Corporation records for 2017 using the straight line method?

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  1. 29 August, 11:00
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    Annual depreciation = $4,300

    Explanation:

    Giving the following information:

    Purchasing price = $27,600

    Salvage value = $1,800

    Useful life = 6 years

    To calculate the depreciation expense using the straight-line method, we need the following formula:

    Annual depreciation = (original cost - salvage value) / estimated life (years)

    Annual depreciation = (27,600 - 1,800) / 6 = $4,300
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