On January 2, 2016, Alpha Company acquired a new machine by signing a 5 year note for $62,000. The estimated service life is eight years and the total units of output to be 200,000. The estimated residual value is $8,000. Using the straight-line method, how much is: (Enter only whole dollar values.)
Cost of machine = $62,000
Useful life = 8 years
Residual value = $8,000
Annual depreciation expense = (Cost of machine-Residual value)/Useful life
= (62,000-8,000)/8
= 54,000/8
= $6,750
2017 Depreciation expense = $6,750
Accumulated depreciation expense for 2 years = Annual depreciation expense x 2
= 6,750 x 2
= $13,500
The accumulated depreciation after the fiscal year 2017 = $13,500
The book value of the machine after the fiscal year 2017 = Cost of machine-Accumulated depreciation expense for 2 years
= 62,000-13,500
= $48,500
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