Question

Maserati Corporation purchased a new machine for its assembly process on August 1, 2010. The cost...

Maserati Corporation purchased a new machine for its assembly process on
August 1, 2010. The cost of this machine was $150,000. The company estimated
that the machine would have a salvage value of $24,000 at the end of its service
life. Its life is estimated at 4 years and its working hours are estimated at 21,000
hours.
a. For depreciation entries entered only once a year, what would be the adjusting check figure: monthly = 2,625.00
entry required for December 31, 2010 using the straight-line method?
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Answer #1

Calculate depreciation expense :

Depreciation expense (per year) = (Original cost-Salvage value)/Useful life

= (150000-24000)/4

Depreciation expense per year = 31500 per year

Depreciation expense for December 31,2010 = 31500*5/12 = 13125

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