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IRINA_888 [86]
2 years ago
4

Lockard Company purchased machinery on January 1, 2010 for 80,000. The machinery is estimated to have a salvage value of $8,000

after a useful life of 8 years.
A) Compute 2010 depreciation expense using the straight-line method.
B) Compute 2010 depreciation using method assuming the machinery was purchased on September 1,2010
Business
1 answer:
tamaranim1 [39]2 years ago
7 0

Answer:

a. $9,000

b. $3,000

Explanation:

The computation of the depreciation expense is shown below:

a.

= (Purchase value of machinery - estimated salvage value) ÷ (useful life)

= ($80,000 - $8,000) ÷ (8 years)

= ($72,000) ÷ (8 years)  

= $9,000

b. The asset is purchased on September 1,2010 , so the depreciation expense should be charged for four months i.e From September to December.

We assume the books are closed on December 31, 2010

So, the depreciation would be

= $9,000 × 4 months ÷ 12 months

= $3,000

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