What is recoverable depreciation?

What is the amount to be recorded as depreciation expense?

• 1. A company purchased factory equipment on April 1, 2010 for $64,000. It is estimated that the equipment will have an $8,000 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, what is the amount to be recorded as depreciation expense at December 31, 2010? 2. A plant asset cost $144,000 and is estimated to have an $18,000 salvage value at the end of its 8-year useful life. What would be the annual depreciation expense recorded for the third year using the double-declining-balance method? 3. A factory machine was purchased for $75,000 on January 1, 2010. It was estimated that it would have a $15,000 salvage value at the end of its 5-year useful life. It was also estimated that the machine would be run 40,000 hours in the 5 years. The company ran the machine for 4,000 actual hours in 2010. If the company uses the units-of-activity method of depreciation, what would be the amount of depreciation expense for 2010?

• Answer:

  1) 64000-8000=56000 56000/10 years= 5600 5600*9/12=4200 2) yr 1 36000 144000-36000=27000 yr 2 117000*.25=29250 in year 3 3) 75000-15000=60000 60000/40000 hrs=1.5 4000 actual hrs * 1.5=6000