A company purchased factory equipment on June 1, 2015, for $160,000. It is estimated that the equipment will have a $10,000 salvage 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, 2015, is

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Depreciation expense for the first year is calculated as follows:Depreciation expense = (Cost of equipment - Salvage value) / Useful life= ($160,000 - $10,000) / 10= $15,000Since the equipment was purchased on June 1, 2015, depreciation expense for the first year is recorded for 7 months (June 1 to December 31).Depreciation expense for 7 months = $15,000 * 7/12= $8,750

A Company Purchased Factory Equipment on June 1, 2015, for $160,000