Question

A company purchased factory equipment on April 1, 2022 for $69600. It is estimated that the equipment will have a $12000 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2022 is:____________

Answer 1

Answer:

$4,320

Explanation:

Calculation for the amount to be recorded as depreciation expense at December 31, 2022

Using this formula

Depreciation expense at December 31, 2022=[(Factory equipment - Salvage value) ÷ 10]× 9/12

Let plug in the formula

Depreciation expense at December 31, 2022=[($69,600 - $12,000) ÷ 10] × 9/12

Depreciation expense at December 31, 2022=$5,760×9/12

Depreciation expense at December 31, 2022=$4,320

Note that 1 April 2022 to 31st December 2022 will give us 9months

Therefore Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2022 is:$4,320