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On January​ 1, 2018, Jordan Company acquired a machine for​ $1,090,000. The estimated useful life of the asset is five years. Residual value at the end of five years is estimated to be​ $60,000. Calculate the depreciation expense per year using the​ straight-line method.

Respuesta :

Answer:

$206000.

Explanation:

Given: Asset purchase value = [tex]\$ 1090000[/tex]

          Residual value after five years= [tex]\$ 60000[/tex]

          Estimated useful life of asset= five years.

Now, we will calculate depreciation per year using straight line method.

Depreciation= [tex]\frac{(purchased\ value\ of\ asset - residual\ value)}{estimated\ useful\ life\ of\ asset}[/tex]

⇒ Depreciation = [tex]\frac{(1090000 - 60000)}{5} = \frac{1030000}{5}[/tex]

∴ Depreciation expense per year = [tex]\$ 20600[/tex]

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