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Oriole Company purchased a new machine on October 1, 2022, at a cost of $90,240. The company estimated that the machine has a salvage value of $8,800. The machine is expected to be used for 70,300 working hours during its 8-year life. Compute the depreciation expense under the straight-line method for 2022 and 2023, assuming a December 31 year-end.

Respuesta :

Answer:

Depreciation for 2022 = $2,545

Depreciation for 2023 = $10,180

Explanation:

The computation of the depreciation expense is shown below:-

Cost of assets = $90,240

Salvage value = $8,800

Useful life of assets = 8 years

Depreciation expenses = (Cost of assets - Salvage value) ÷ Estimated useful life of assets

= ($90,240 - $8,800) ÷ 8

= $10,180

So Depreciation for 2022 = (Depreciation expenses × 3 months(i.e. from Oct 1 to Dec 31)) ÷ 12

= ($10,180 × 3 months) ÷ 12

= $2,545

and Depreciation for 2023 = $10,180

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