Question

Wickland Company installa a manufacturing machine in its production facility at the beginning of the year at a cost of $93,000. The machine's useful life is estimated to be 20 years, or 390,000 units of product, with a $7,000 salvage value. During its second year, the machine produces 15,600 units of product. Determine the machine's second year depreciation under the straight-line method.

Answer 1

Cost of Machine = $93,000

Total estimated Useful life = 20 years

Depreciation Expense under SLM = (Cost - Salvage) / useful life

Depreciation Expense under SLM = ($93,000 - $7,000) / 20

Depreciation Expense under SLM = $4,300

So, THe Machine's second year depreciation under the straight-line method is $4,300