The annual depreciation expense of an asset under the straight line method is calculated using the following formula.
Depreciation expense = (Cost – Salvage Value) / life
Depreciation expense = (48000 – 3,000) / 5
Depreciation expense = $9,000 per year
As the depreciation expense under straight line method is uniform for each year it will be $9,000 for 2004, 2005 and 2006. In 2007 the machine was sold on August 1 therefore depreciation expense will only be calculated for 7 months
Depreciation expense 2007 = 9,000 X 7 / 12
Depreciation expense 2007 = $5,250
Kindly order term papers, essays, research papers, dissertations, thesis, book reports from the order page.