Answer:
For the year 2022 , $2,515
For the year 2023, $10,060
Explanation:
In this question, we are asked to compute the depreciation expense under the straight-line method for the years 2022 and 2023 for the new machine purchased by Crane company.
We employ a mathematical approach in tackling this.
Mathematically;
Straight line depreciation = (cost - salvage value)/ number of years useful
From the question we can identify the following;
Cost of purchase= $89,920
Salvage value = $9,440
Number of years useful = 8 years
Plugging this to get the straight line depreciation, we have;
(89,920-9,440)/8 = 80,480/8 = 10,060
For the year 2022, we have ; 3 months window since, machine was purchased October and we are assuming year end December 31st
Thus, straight line depreciation for year 2022 = 3/12 * 10,060 = $2,515
For 2023, straight line depreciation = 10,060( since we have a full year)
