On May 1, Crane Company purchased factory equipment for $763600. The asset's useful life in hours is estimated to be 197000. The estimated salvage value is $49000 and the estimated useful life in years is 9. The machine was used for 26000 hours in the first year. If the straight-line method will be used, what is depreciation expense for the first year of the asset's life? O $94380 O $56562 O $52933 O $79400

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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.