Ace Company purchased a machine valued at $327,000 on August 1. The equipment has an estimated useful life of seven years or 2.5 million units. The equipment is estimated to have a salvage value of $8,900. Assuming the straight-line method of depreciation, what is the amount of depreciation expense that needs to be recorded at the end of the first year?

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Answer:

$45,442.86

Explanation:

Straight line depreciation expense =( Cost of asset - Salvage value) / useful life

($327,000 - $8,900) / 7 = $45,442.86

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