At the beginning of the year, Powers Company purchased a piece of machinery for $50,000

Accounting Mar 18, 2021

At the beginning of the year, Powers Company purchased a piece of machinery for $50,000. It has a salvage value of $5,000, an estimated useful life of 9 years, and estimated units of output of 90,000 units. Actual units produced during the first year were 11,000. Depreciation expense for the first year under the straight-line method is:

a. $5,556.

b. $5,500.

c. $5,000.

d. $5,300.

Expert Solution

Answer:

c .

Step-by-Step explanation

Depreciation expense = (Cost - salvage value) / no. of years

= ($50,000 - $5,000) / 9

= $5,000

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