Forwind Ltd has recently acquired a machine that cost $29 000. The machine normally remains productive for six years? It is expected to continue in the production process at Forwind for eight years due to the excellent maintenance and operating policies in place at Forwind?

The machine has the capacity to produce 20 000 units over a six-year life and 27 000 units over an eight-year life. Its salvage value after six years is expected to be $2500 and after eight years $1000?

What depreciation would be charged in the first year of the machine's operation when 4000 units were produced (rounded to the nearest dollar)?

Answer rating: 100% (QA)

To calculate the depreciation charged in the first year we need to determine the depreciable cost of the machine which is the cost of the machine minus its salvage value For the sixyear life Depreciab... View the full answer