Required information The following information applies to the questions displaye

Question

Required information The following information applies to the questions displayed below On April 1, 2016, Cyclone's Backhoe Co. purchases a trencher for $314,000. The machine is expected to last five years and have a salvage value of $57,000. Compute depreciation expense for both years ending December 2016 and 2017 assuming the company uses the straight-line method Choose Numerator: Choose Denominator: Annual Depreciation Annual depreciation Depreciation Expense Year Annual Depreciation x 2016 2017 Fraction of Year

Explanation / Answer

Choose Numerator: / Choose Denominator: = Annual Depreciation Cost minus salvage / Estimated useful life (years) Annual depreciation $257,000 / 5 = $51,400 Year Annual Depreciation x Fraction of Year = Depreciation Expense 2016 $51,400 x 9/12 = $38,550 2017 $51,400 x 12/12 = $51,400

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