contestada

On January 1, 2019, Woodstock, Inc. purchased a machine costing $37,850. Woodstock also paid $1,950 for transportation and installation. The expected useful life of the machine is 7 years and the residual value is $4,100. How much is the annual depreciation expense, assuming use of the straight-line depreciation method

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Kolawole845

Answer:

Annual depreciation expense=$5,100

Explanation:

Using the straight line method , an equal amount is charged as depreciation for each each over the estimated useful life of the asset.

Annual depreciation = (Cost - residual value)/Estimated number of years

Cost of the machine= 37,850 + 1,950 = 39,800

Annual depreciation expense= (39,800-4,100)/7= 5,100

Annual depreciation expense=$5,100

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