Question

Whispering Company purchased machinery on January 1, 2020, for $88,800. The machinery is estimated to have a salvage value of $8,880 after a useful life of 8 years.

Compute 2020 depreciation expense using the sum-of-the-years'-digits method.

Depreciation expense

$enter Depreciation expense in dollars

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Compute 2020 depreciation expense using the sum-of-the-years'-digits method, assuming the machinery was purchased on April 1, 2020. (Round answer to 0 decimal places, e.g. 5,125.)

Depreciation expense

$enter Depreciation expense in dollars rounded to 0 decimal places

Answer 1

Depreciable base = $88,800 – 8,880
                             = $79,920

Life = 8 years

Sum of digit of life = 1+2+3+4+5+6+7+8 = 36

(1)
Depreciation Expense = $79,920 * 8/36

Depreciation Expense = $17,760

(2)
Depreciation Expense = $ 17,760 * 9months / 12months

Depreciation Expense = $13,320