Question

Homework: Chapter 9 Homework core: 0 of 1 pt 1 of 11 (0 complete) 9-1 (similar to) HW Score: 0%, 0 of 1 Question Help Daily Enterprises is purchasing a $9.7 million machine. It will cost $52,000 to transport and install the machine. The machine has a depreciable life of five years and will have no salvage value. If Daily uses straight-line depreciation, what are the depreciation expenses associated with this machine? The yearly depreciation expenses are 5 (Round to the nearest dollar.)

Answer 1

The yearly depreciation expense using the straight-line method

The annual depreciation expense using the straight-line method = [Cost of the asset – Salvage Value] / Useful life

= [(Purchase costs + Transportation & Installation charges) – Salvage Value] / Useful life

= [($9,700,000 + $52,000) - $0] / 5 Years

= [$9,752,000 - $0] / 5 Years

= $9,752,000 / 5 Years

= $1,950,400 per year

“Hence, the yearly depreciation expense using the straight-line method will be $1,950,400”