Question: Marjorie, Inc. acquired a machine for $320,000 on August 31, 2007. The machine has a five-year life, a $50,000 salvage value, and was depreciated using

Marjorie, Inc. acquired a machine for $320,000 on August 31, 2007. The machine has a five-year life, a $50,000 salvage value, and was depreciated using the straight-line method. On May 31, 2010, a test for recoverability reveals that the expected net future undiscounted cash inflows related to the continued use and eventual disposal of the machine total $150,000. The machine’s actual fair value on May 31, 2010, is $135,000, with no salvage value. Assuming a loss on impairment is recognized May 31, 2010, what is Marjorie’s depreciation expense for June 2010?

a. $6,352

b. $5,000

c. $4,500

d. $3,148

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