A company purchased factory equipment on April 1, 2014 for €160,000. It is estimated that the equipment will have a €20,000 residual value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2014 is

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The annual depreciation expense is calculated as (Cost - Residual Value) / Useful Life = (€160,000 - €20,000) / 10 = €14,000. Since the equipment was purchased on April 1, 2014, the depreciation for 2014 is for 9 months: (€14,000 / 12) * 9 = €10,500.

A Company Purchased Factory Equipment on April 1, 2014 for €160,000