Your Company purchased equipment that cost $55,000 cash on January of Year One.

Your Company purchased equipment that cost $55,000 cash on January of Year One. The equipment had an expected useful life of six years and an estimated salvage value of $4,000. Your Company depreciates its assets under the straight line method. What is the amount of depreciation expense (Blank) appearing on the Year Four income statement and the amount of accumulated depreciation (Blank) appearing on the Year Four balance sheet?

Expert Solution

Annual depreciation=(Cost-Salvage value)/Useful life

=(55000-4000)/6=$8500

Hence depreciation for the fourth year=$8500.

Accumulated depreciation for the fourth year=(8500*4)=$34000.

ekkarill92 answered 2 years ago

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