Exercise 9-6 (Part Level Submission) Rottino Company purchased a new machine on

Question

Exercise 9-6 (Part Level Submission)

Rottino Company purchased a new machine on October 1, 2017, at a cost of $134,000. The company estimated that the machine will have a salvage value of $20,000. The machine is expected to be used for 10,000 working hours during its 5-year life.

(a)

2017

Exercise 9-6 (Part Level Submission)

Rottino Company purchased a new machine on October 1, 2017, at a cost of $134,000. The company estimated that the machine will have a salvage value of $20,000. The machine is expected to be used for 10,000 working hours during its 5-year life.

Explanation / Answer

Depreciation Expense per year under  straight-line method = (Cost - Salvage Value ) / Useful Life

= ( $ 134,000 - $ 20,000) / 5 Years

= $ 22,800

Period in 2017 =  October 1, 2017 to December 31,2017

= 3 Months

Hence, depreciation expense for 2017 = Depreciation Expense per year under  straight-line method * 3 Months / 12 Months

= $ 22,800 * 3/ 12

= $ 5,700

Hence the correct answer is :

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.