Question

Lomani Ltd acquired two new machines for cash on 1 January 2017. The cost of

Answer 1

Answer:

The depreciation expense will be

Machine A : $38,000

Machine B : $55,000

Explanation:

Straight line depreciation recognize an assets carrying amount evenly over its useful life.

Straight line Depreciation = (Cost - Estimated Residual Value) / useful life

Depreciation expense for Machine A:

($400,000 - $20,000) / 10 years

= $38,000

Depreciation expense for Machine B:

($600,000 - $50,000) / 10 years

= $55,000