Exercise 9-5 sandhill co. purchased a new machine on october 1, 2017, at a cost of $80,010. the company estimated that the machine has a salvage value of $7,280. the machine is expected to be used for 72,400 working hours during its 7-year life. compute the depreciation expense under the straight-line method for 2017 and 2018, assuming a december 31 year-end. (

2017 = $2,598 and 2018 = $10,390

Explanation:

The computation of the depreciation expense for the second year is shown below:

= (Original cost - residual value) ÷ (useful life)

= ($80,010 - $7,280) ÷ (7 years)

= ($72,730) ÷ (7 years)  

= $10,390

In this method, the depreciation is same for all the remaining useful life

For 2017, the depreciation expense would be

= $10,390 × 3 months ÷ 12 months

= $2,598

The three months is calculated from the October 1, 2017, to December 31, 2017

And, in 2018 it would be $10,390

you will have $2593.74 in 10 years if you set aside $1,000 at 10%

you will have $9321.91 in 20 years if you set aside $2000 at 8%

you will have $1469.32 in 5 years if you set aside $1000 at 8%

you will have $1296.87 in 10 years if you set aside $500 at 10%

you will have $239.66 in 15 years if you set aside $100 at 6%

you will have $4660.96 in 20 years if you set aside $1000 at 8%