Question: Computing Straight - Line Depreciation On January 1 , equipment is purchased for $ 2 4 0 , 0 0 0 . The company incurred

Computing Straight-Line Depreciation
On January 1, equipment is purchased for $240,000. The company incurred installation costs of $600 and freight charges on delivery of $1,000. The equipment has a $20,000 residual value and an expected useful life of five years.
a. Determine depreciation expense for the year using the straight-line depreciation method.
$Answer 1
b. If the fair value of equipment decreased to $185,000 on December 31, determine depreciation expense for the year using the straight-line depreciation method.
$Answer 2

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