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the company purchased equipment on July 1 2019 for 38,0000 and paid an additional $2,000 to...

the company purchased equipment on July 1 2019 for 38,0000 and paid an additional $2,000 to have it properly installed. residual value is $5000 and the estimated life is 5 years?

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Homework Answers

Answer #1

Given information,

Cost = $380000

additional expenses for installation = $2000

Total cost = $380000 + $2000 = $382000

Residual value = $5000

Useful life = 5 years

Depreciation for machine =

= (Cost - residual value) ÷ useful life

= (382000 - 5000) ÷ 5 years

= 377000 ÷ 5

= 75400 per year

Depreciation at the end of year 1 :-

Machine was used only for six months (July to December) :-

Depreciation for 6 months in year 1 =

= 75400 × 6/12

= $37700

Depreciation at the end of year 1 = $37700

Depreciation per year = $75400

Assumed that year end is on december 31.

These are all the information required to solve the above given question.

If there is any clarifications required regarding the above provided answer, please mention them in comment box.

I hope, all the above mentioned information and calculations are useful and helpful to you.

Thank you.

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