Question

Required information Use the following information for the Exercises below. [The following information applies to the questions displayed below.] On April 1, Cyclone's Co. purchases a trencher for $292,000. The machine is expected to last five years and have a salvage value of $46,000. Exercise 8-11 Straight-line, partial-year depreciation LO C2 Compute depreciation expense at December 31 for the first and second year assuming the company uses the straight-line method. Choose Numerator: / Choose Denominator: Annual Depreciation Annual depreciation Depreciation Expense Annual Depreciation Fraction of Year Year х First year х Second year х

Answer 1

Straight line depreciation 1 Choose Denominator / Life of the Machinery | = (Cost of 5 Choose Numerator (Cost of Machinery - Salvage value) 246000 Annual Depreciation 49200 49200 Annual Depreciation Expense Depreciation Expense 49200 Depreciation Expense 36900 49200 = | Year First year Second Year x x Fraction of year 3/4 1 | First year trencher is for 9 months so fraction is 9/12 it is in short 3/4 and second year is for complete year so 12/12 i.e 1 ||