Question

Daily Enterprises is purchasing a $ 9.8 million machine. It will cost $ 48,000 to transport and install the machine. The machine has a depreciable life of five years and will have no salvage value. If Daily uses​ straight-line depreciation, what are the depreciation expenses associated with this​ machine?

Answer 1

$1,969,600

Step-by-step explanation:

Total cost to be capitalized = $9,800,000 + $48,000

= $9,848,000

Useful life = 5 years

Using straight line method

Depreciation expense = $9,848,000/5

= $1,969,600

The depreciation expenses associated with this​ machine amounts to $1,969,600.