On January 1, 2016, Woodstock, Inc. purchased a machine costing $35,100. Woodstock also paid $1,100 for transportation and installation. The expected useful life of the machine is 5 years and the residual value is $5,200. How much is the annual depreciation expense assuming use of the straight-line depreciation method

Respuesta :

Answer: $6,200

Explanation:

machine cost $35,100

Transport & installation cost $1,100

Total cost of machine = $36,200

Useful life is 5 years

Residual value is $5,200

Depreciation on a straight line bases is calculated thus:

= cost. - residual vale/ useful life

= $36,200 - $5,200/5

= $31,000/5

= $6,200

Annual depreciation is $6,200