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VikaD [51]
3 years ago
5

At the beginning of 2009, Glass Manufacturing purchased a new machine for its assembly line at a cost of $600,000. The machine h

as an estimated useful life of 10 years and estimated residual value of $50,000. Under the straight-line method, how much depreciation would Glass take in 2010 for financial reporting purposes? A. $55,000. B. $60,000. C. $65,000. D. $110,000.
Business
1 answer:
nikdorinn [45]3 years ago
8 0

Answer:

A. $55,000.

Explanation:

The cost of the new machine in 2009 is $600,000

The residual value was $50,000

Useful life is ten years

Under the straight-line depreciation method, the depreciation amount in 2020  will be

The depreciable amount the machine cost - residual value

= $600,000 - $50,000

= $550,000

The depreciation rate will be 1/10 year x 100 = 10%

depreciation per year will be 10% x 555,000

=10/100 x 550,000

=$55,000

Depreciation 2010, the second year will $55,000 since the depreciation amount is a constant figure under the straight-line method.

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