Question

On January​ 1, 2018,​ Jordan, Inc. acquired a machine for $ 1 comma 010 comma 000 . The estimated useful life of the asset is five years. Residual value at the end of five years is estimated to be $ 52 comma 000 . Calculate the depreciation expense per year using the straightminus line method.

Answer 1

$189,600

Step-by-step explanation:

Depreciation is the systematic allocation of the cots of an asset to the income statement over a period of use based on the estimated useful life of the asset. It is the ratio of the cost less residual value of an asset to the estimated useful life of the asset.

Depreciation may be expressed mathematically as

Depreciation = (cost - residual value)/estimated useful life

= ($1,000,000 - $52,000)/5

= $189,600