On January 1, 2015, Anodel Inc. acquired a machine for $1,000,000. The estimated useful life of the asset is 5 years. Residual value at the end of 5 years is estimated to be $50,000. Calculate the depreciation expense per year using the straight-line method.

Question

Quizplus · Accepted Answer

To calculate the depreciation expense per year using the straight-line method, we need to subtract the residual value from the cost of the asset and divide by the useful life in years.

(1,000,000 - 50,000) / 5 = 190,000

Therefore, the depreciation expense per year is $190,000.