Question

Check my work 6 ! Required information [The following information applies to the questions displayed below.] Part 4 of 6 The following events apply to Gulf Seafood for the Year 1 fiscal year: points 1. The company started when it acquired $33,000 cash by issuing common stock. 2. Purchased a new cooktop that cost $14,900 cash 3. Earned $19,500 in cash revenue. 4. Paid $11,400 cash for salaries expense. 5. Adjusted the records to reflect the use of the cooktop. Purchased on January 1, Year 1, the cooktop has an expected useful life of five years and an estimated salvage value of $2,600. Use straight- line depreciation. The adjusting entry was made as of December 31, Year 1. Skipped eBook Hint Print References d. What amount of depreciation expense would Gulf Seafood report on the Year 2 income statement? Depreciation expense 10

Answer 1

Under straight line method of depreciation,

Depreciation per annum = (initial cost - salvage value)/useful life

= ($14900 - $2600)/5

= $2460

depreciation expense under straight-line method is uniform each year

therefore,

for year 2 income statement:

depreciation expenses = $2460