At the beginning of the year, a Company purchased equipment for $50,000. The company estimated the...

 

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At the beginning of the year, a Company purchased equipment for $50,000. The company estimated the useful life to be 10 years with $8,000 residual value. At the end of the year, the equipment had a fair value of $32,000. For Year 1, the Company Controller recorded $18,000 as depreciation for the year, which was the decline in the fair value. Is this the correct way to measure depreciation expense for the year? Yes or no? If yes, explain why you selected yes. If no, explain why you selected no and calculate the correct depreciation amount. At the beginning of the year, a Company purchased equipment for $50,000. The company estimated the useful life to be 10 years with $8,000 residual value. At the end of the year, the equipment had a fair value of $32,000. For Year 1, the Company Controller recorded $18,000 as depreciation for the year, which was the decline in the fair value. Is this the correct way to measure depreciation expense for the year? Yes or no? If yes, explain why you selected yes. If no, explain why you selected no and calculate the correct depreciation amount.

Answer rating: 100% (QA)

No the Company Controller recorded the depreciation expense incorrectly Heres why Depreciation is NO... View the full answer