A company purchased factory equipment on June 1, 2021, 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, 2021, is

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The annual depreciation expense using the straight-line method is calculated as follows:
Depreciation expense = (Cost - Salvage value) / Useful life
Depreciation expense = ($160,000 - $10,000) / 10
Depreciation expense = $15,000 per year

To determine the amount of depreciation expense to be recorded at December 31, 2021, we need to calculate the depreciation for the portion of the year from June 1 to December 31. This is 7/12 of a year.

Depreciation expense for the period from June 1 to December 31, 2021, is calculated as follows:
Depreciation expense = $15,000 x (7/12)
Depreciation expense = $8,750

Therefore, the amount to be recorded as depreciation expense at December 31, 2021, is $8,750 (Option B).

A Company Purchased Factory Equipment on June 1, 2021, for $160,000.It