Asked by louna
Jay Corp. bought a machine for $15,000. The machine is expected to produce 10,000 units. The machine has a residual value of $5,000. Assuming the machine produces 400 units during Year 1, what should the depreciation expense be?
my is answer is $ 300.00 If work it out please show the way.
my is answer is $ 300.00 If work it out please show the way.
Answers
Answered by
drwls
400 units is 1/25 of the expected production capability (10,000). If you are calculating depreciation based upon wear and tear rather that time, You would take 1/25 of ($15,000-5,000) or 4250 in depreciation.
The US government is contantly changing depreciation rules as a way of either stimulating or cooling off the economy. The method I have chosen may not be what is recommended at present.
The US government is contantly changing depreciation rules as a way of either stimulating or cooling off the economy. The method I have chosen may not be what is recommended at present.
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