Minor Company installs a machine in its factory at the beginning of the year at a cost of $135,000. The machine's useful life is estimated to be 5 years, or 300,000 units of product, with a $15,000 salvage value. During its first year, the machine produces 64,500 units of product. Determine the machines' first year depreciation under the straight-line method.
A) $27,000.
B) $29,025.
C) $25,800.
D) $23,779.
E) $24,000.
E) $24,000.
Explanation: Depreciation Expense = (Cost - Salvage Value)/Estimated Useful Life
Depreciation Expense = ($135,000 - $15,000)/5 = $24,000
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