Ask Question
4 October, 19:56

Steele Inc. purchased a machine for $500,000 on January 1, Year1. The machine has a $20,000 residual value and an estimated life of 20 years. The machine is expected to produce 1,000,000 widgets over its life. Steele prepares annual financial statements at 12/31 each year. What is the 'depreciable cost' of the machine? (This would be the same regardless of what method of depreciation is used.)

+2
Answers (1)
  1. 4 October, 20:20
    0
    Answer: Depreciable cost of the machine = $4,80,000

    Explanation:

    Machine purchasing cost = $500,000 on January 1, Year 1

    Residual value of machine = $20,000

    Estimated life of machine = 20 years

    machine is expected to produce = 1,000,000 widgets over its life

    Depreciable cost of the machine = puchasing cost of machine - Residual value of machine

    = $500,000 - $20,000

    = $4,80,000
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Steele Inc. purchased a machine for $500,000 on January 1, Year1. The machine has a $20,000 residual value and an estimated life of 20 ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers