Gomez Company purchases a piece of equipment on Jan. 2, 2014, for $30,000. The equipment has an estimated life of eight years or 50,000 units of production and an estimated residual value of $3,000. Lester uses a calendar fiscal year. Using the straight-line method, what is the depreciation expense for 2014?

Depreciation expense for 2014 = $3,375

Explanation:

Given:

Equipment cost = $30,000

Estimated life = 8 years or 50,000 units

Estimated residual value = $3,000

Find:

Depreciation expense for 2014 = ?

Computation:

Depreciation = (Equipment cost - Estimated residual value) / Estimated life

Depreciation expense for 2014 = ($30,000 - $,3000) / 8

Depreciation expense for 2014 = ($27,000) / 8

Depreciation expense for 2014 = $3,375Answer:

Depreciation expense for 2014 = $3,375

Explanation:

Given:

Equipment cost = $30,000

Estimated life = 8 years or 50,000 units

Estimated residual value = $3,000

Find:

Depreciation expense for 2014 = ?

Computation:

Depreciation = (Equipment cost - Estimated residual value) / Estimated life

Depreciation expense for 2014 = ($30,000 - $,3000) / 8

Depreciation expense for 2014 = ($27,000) / 8

Depreciation expense for 2014 = $3,375