On January 1, 2024, Tyson Manufacturing Company purchased a machine for $40,800,000. Tyson's management expects to use the machine for 34,000 hours over the next six years. The estimated residual value of the machine at the end of the sixth year is $43,000. The machine was used for 3,600 hours in 2024 and 5,800 hours in 2025. What is the depreciation expense for 2024 if the company uses the units−of−production method of depreciation? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
On January 1, 2024, Tyson Manufacturing Company purchased a machine for
Tyson's management expects to use the machine for
hours over the next six years. The estimated residual value of the machine at the end of the sixth year is
The machine was used for
hours in 2024 and
hours in 2025. What is the
method of depreciation? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
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