On june 30, 2016, colora printers purchaed a printer for 69,000. it expects the printer to last for four years and have a residual value of 10,000. compute the depreciation expense on the printer for the year ended december 31, 2016, using the straight line method.

The depreciation expense on the printer for the year ended december 31, 2016 was $7,375

Explanation:

Colora Printers uses the straight-line method of depreciation, Depreciation Expense each year is calculated by following formula:  

Annual Depreciation Expense = (Cost of the printer − Residual Value)/Useful Life  = ($69,000 - $10,000)/4 = $59,000/4 = $14,750

In 2016, the printer was used from June 30 to December 31 (6 months - half-year).

Depreciation Expense for 2016 = ($14,750/12) x 6 = $7,375

The depreciation expense on the printer for the year ended december 31, 2016 was $7,375

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