On January 1,2011,Swinger,Inc.purchases a batting machine for $240,000 that has an estimated useful life of 5 years and an expected residual value of $20,000.What will the company report on its income statement for the year ended December 31,2012?

Question

Quizplus · Accepted Answer

The company will record depreciation expense each year using the straight-line method, which is ($240,000 - $20,000) / 5 years = $44,000 per year. Therefore, the company will report depreciation expense of $44,000 on its income statement for the year ended December 31, 2012.