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In anticipation of digby corporation's new product, dash, the company purchased new plant and equipment for $27,360,000. The plant and equipment is expected to be used for 15 years and has a planned salvage value of $0. Assuming straight-line depreciation, how much will digby expense in depreciation next year (and only next year) for the new equipment? (note: enter your answer as a whole number with no $, no commas, and no period, for example, $2,734,985. 75 would be entered as 2734986).

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abiolataiwo2015

Digby expense in depreciation next year (and only next year) for the new equipment is $1,824,000.

Depreciation expense

Using this formula

Depreciation expense=Cost of new plant and property- Salvage value/Number of years

Where:

Cost of new plant and property=$27,360,000

Salvage value=$0

Number of years=15 years

Let plug in the formula

Depreciation expense=$27,360,000-$0/15 years

Depreciation expense=$27,360,000/15 years

Depreciation expense=$1,824,000

Inconclusion Digby expense in depreciation next year (and only next year) for the new equipment is $1,824,000.

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