carson Company has a piece of machinery that costs $500,000 and is expected to have a useful life of 4 years. Residual value is expected to be $50,000. Using the straight-line method, what is depreciation expense for the first year

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Business

Andreas Vasquez

13 April, 00:26

carson Company has a piece of machinery that costs $500,000 and is expected to have a useful life of 4 years. Residual value is expected to be $50,000. Using the straight-line method, what is depreciation expense for the first year

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Answers (1)

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Roger Richards · Answer 1

Annual depreciation = $112,500

Explanation:

Giving the following information:

Carson Company has a piece of machinery that costs $500,000 and is expected to have a useful life of 4 years. The residual value is expected to be $50,000.

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

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

Annual depreciation = (500,000 - 50,000) / 4 = $112,500