Question

E9-5, Determine straight-line depreciation for partial period. Hinshaw Company purchased a new machine on October 1, 2017, at a cost of company estimated that the machine has a salvage value of $8,000 to be used for 70,000 working hours during its $90,000 The 1, at a cost of The machine is expected -year life. Instructions: Compute the depreciation expense under the straight-line method for 2017 and 2018, assuming a December 31 year-end. Amount | - Amount Straight-line method: Formula Number per year 2014 depreciation = L Amount * Fraction = Formula 1 2015 depreciation = Formula

Answer 1

Straight line method :-

(Cost - salvage value)/life of the asset = Depreciation per year

(90,000 - 8,000)/8 = $10,250

2017 depreciation = 10,250 x 3/12 = $2,562.50

2018 depreciation = $10,250