A Company Purchased a Machine for $75,000 That Was Expected

question 152

Essay

A company purchased a machine for $75,000 that was expected to last six years and have a salvage value of $6,000.At the beginning of the machine's fourth year,the company decided that the machine's estimated useful life should be revised to a total of 10 years instead of 6 years.Also,the salvage value was re-estimated to be $5,500.Straight-line depreciation was used throughout the machine's life.Calculate the depreciation expense for the fourth year of the machine's useful life.

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Definitions:

Breadth of Line

The variety of products that a company offers under the same brand.

Depth of Line

The range of varieties offered within a product category by a business.

Manufacturer's Sales Office

The office or department within a manufacturing company that is responsible for managing sales activities and relationships with buyers or distributors.

Manufacturer's Branch Office

A localized office or division of a manufacturing company that conducts operations closer to specific markets or suppliers.