Homework Answers
31.
Cost of machine = $75,000
Residual value = $10,000
Useful life = 10 years
Annual depreciation expense = (Cost of machine - Residual value)/Useful life
= (75,000 - 10,000)/10
= 65,000/10
= $6,500
In year 1, depreciation expense will be charged for 6 months only.
Depreciation expense for year 1 = 6,500 x 6/12
= $3,250
In year 1, depreciation expense will be charged for full year
Depreciation expense for year 2 = 6,500
Correct option is (a)
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salvage value 6,000
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salvage value 10,000
useful life 8 years
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salvage value 6,000
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salvage value 6,000
useful life 10 years
purchased 7/1/16
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salvage value 10,000
useful life 8 years
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salvage value 6,000
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