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alina1380 [7]
3 years ago
8

Starling Company purchased machinery at the beginning of Year 1 at a cost of $86,100. The machinery has an estimated life of fiv

e years and an estimated residual value of $4,305. Accumulated depreciation using the SYD depreciation method amounted to $49,077 at the end of Year 2 (comprised of $27,265 for Year 1 and $21,812 for Year 2). Starling switched to the straight-line depreciation method at the beginning of Year 3. What is the Year 3 depreciation expense relating to this machinery?
Business
1 answer:
Alja [10]3 years ago
5 0

Answer:  $10,906

Explanation:

Given that,

Purchased machinery at the beginning of Year 1 = $86,100

machinery has an estimated life of five years,

Estimated residual value = $4,305

Accumulated depreciation = $49,077 at the end of Year 2

Year 3 Depreciation expense:

= \frac{Cost\ of\ machinery - Estimated\ residual\ value - Accumulated\ depreciation}{3}

= \frac{86,100 - 4,305 - 49,077}{3}

= $10,906

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