Question

Cullumber Company purchased a new machine on October 1, 2022, at a cost of $66,000. The company estimated that the machine has a salvage value of $7,140. The machine is expected to be used for 72,000 working hours during its 6-year life.

Compute the depreciation expense under the straight-line method for 2022 and 2023, assuming a December 31 year-end. (Round answers to 2 decimal places, e.g. 5,275.25.)

		2022		2023
The depreciation expense under the straight-line method		$Enter a dollar amount for year 2022		$Enter a dollar amount for year 2023

Answer 1

Depreciation expense under the straight-line method for 2022 and 2023 is calculated as follows:

Depreciation Expenses = (Cost - Salvage Value) / Useful Life        

                                  = ( $66,000 - $7,140 ) / 6- year

                                  = 58,860 / 6 Years

                                 = $9,810

Under straraight line method the amount of the depreciation will remain same.

	Depreciation Expenses ($)
Depreciation from (October 1, 2022 to December 31 ,2022) = $9,810 *3/12	2,453
Depreciation from (Jan.1, 2023 to December 31 ,2023)	9,810