In 2021, internal auditors discovered that Fay, Inc., had debited an expense account for the $2,635,000 cost of a machine purcha
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Answer: The company will record a depreciation of $375 as depreciation.
We begin by calculating the depreciable value of the asset.
The depreciable value is $12,000.
The useful life of the asset is 8 years from the date of purchase.
So, the depreciation for one year will be .
Hence the depreciation for one year is
Since the equipment was purchased at the end of September, we can only charge depreciation for 3 months on 31st December.
So, the depreciation expense will be