Worth Manufacturing Company purchased a new production machine on July 1, 2010, for $140, 000.The estimated salvage value is $10, 000.The company uses units-of-production depreciation and estimates the machine will produce 100, 000 units during its useful life.In 2010, the company manufactured 5, 000 units after acquiring the machine.Depreciation expense for 2010 will be

Question

Quizplus · Accepted Answer

The depreciation expense is calculated based on the units-of-production method, which is [(Cost - Salvage Value) / Total Estimated Units] * Units Produced in 2010 = [($140,000 - $10,000) / 100,000] * 5,000 = $6,500.

Worth Manufacturing Company Purchased a New Production Machine on July