A company purchased a machine for $50,000 with a useful life of 5 years and no salvage value. What is the annual depreciation expense using straight-line method?

Practice Questions

1 question

$10,000
$5,000
$15,000
$2,000

Questions & Step-by-step Solutions

1 item

Q: A company purchased a machine for $50,000 with a useful life of 5 years and no salvage value. What is the annual depreciation expense using straight-line method?

Solution: Annual Depreciation Expense = (Cost - Salvage Value) / Useful Life = ($50,000 - $0) / 5 = $10,000.

Steps: 6

Step 1: Identify the cost of the machine. In this case, the cost is $50,000.
Step 2: Identify the salvage value of the machine. Here, the salvage value is $0.
Step 3: Identify the useful life of the machine. The useful life is 5 years.
Step 4: Use the straight-line depreciation formula: Annual Depreciation Expense = (Cost - Salvage Value) / Useful Life.
Step 5: Plug in the values: Annual Depreciation Expense = ($50,000 - $0) / 5.
Step 6: Calculate the result: Annual Depreciation Expense = $50,000 / 5 = $10,000.

A company purchased a machine for $50,000 with a useful life of 5 years and no salvage value. What is the annual depreciation expense using straight-line method?

Practice Questions

Questions & Step-by-step Solutions

Related Questions

On a scale of 0–10, how likely are you to recommend The Soulshift Academy?