MuZ acquired a factory equipment for $5,000 on 1st January, 2015. The following information is also made available:
- Expected useful life is 6 years
- Estimated scrap value of the equipment is $800
Required:
Determine the depreciation amount charged in the financial statement in year 2015 with respect to this factory equipment, assuming a straight line method is in use.
- Expected useful life is 6 years
- Estimated scrap value of the equipment is $800
Required:
Determine the depreciation amount charged in the financial statement in year 2015 with respect to this factory equipment, assuming a straight line method is in use.
Suggested solution
From the information given above, the computation of the depreciation amount is summarized as follows
Thus, MuZ is expected to charge $700 in its income statement in year 2015
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