Asked by
Alexandre Kanyeshuli
on Dec 16, 2024
Verified
Santayana Company purchased a machine on January 1 2015 for $60000 with an estimated salvage value of $15000 and an estimated useful life of 8 years. On January 1 2017 Santayana decides the machine will last 12 years from the date of purchase. The salvage value is still estimated at $15000. Using the straight-line method the new annual depreciation will be
A) $3375.
B) $3750.
C) $4500.
D) $5000.
Straight-Line Method
A technique for determining depreciation or amortization by equally distributing an asset's cost throughout its lifespan.
Salvage Value
An asset’s expected trade-in value at the point it concludes productive life.
Depreciation
Spreading out the cost of a tangible asset systematically over its life of service.
- Familiarize oneself with the processes of amortization, depreciation, and depletion in the context of intangible assets and tangible long-lived assets.
- Analyze the effects of changes in asset estimates and asset exchanges on financial statements.
Verified Answer
BC
Learning Objectives
- Familiarize oneself with the processes of amortization, depreciation, and depletion in the context of intangible assets and tangible long-lived assets.
- Analyze the effects of changes in asset estimates and asset exchanges on financial statements.