On January 1, 2013, Scott Corporation purchased equipment for $60,000. A discount of 2% was granted on the equipment; the shipping terms were FOB shipping point, and the freight cost was $1,500. Installation and testing costs amounted to $2,000. The equipment had an estimated useful life of 4 years and salvage value of $5,000. At the beginning of 2015, Scott revised the expected life of the asset to six years and the salvage value to $6,000.
Required:
Compute the depreciation expense using straight-line method for each of the six years.

Question

Quizplus · Accepted Answer

The Answer of On January 1, 2013, Scott Corporation purchased equipment for $60,000. A discount of 2% was granted on the equipment; the shipping terms were FOB shipping point, and the freight cost was $1,500. Installation and testing costs amounted to $2,000. The equipment had an estimated useful life of 4 years and salvage value of $5,000. At the beginning of 2015, Scott revised the expected life of the asset to six years and the salvage value to $6,000.
Required:
Compute the depreciation expense using straight-line method for each of the six years.

On January 1, 2013, Scott Corporation Purchased Equipment for $60,000