On June 1, Harding Co. purchased a machine for $14,000 and estimates it will use the machine for five-years with a $2,000 salvage value. Using the straight-line depreciation method, compute the machine's first year (partial) depreciation expense for June 1st through December 31st.

The machine's first year (partial) depreciation expense was $1,400

Explanation:

Harding Co. uses straight-line depreciation method, Depreciation Expense each year is calculated by following formula:

Annual Depreciation Expense = (Cost of machine - Salvage Value) / Useful Life = ($14,000 - $2,000) / 5 = $2,400

Depreciation Expense of each month = $2,400/12 = $200

In the first year, from June 1st through December 31st, the machine had been used for 7 months.

Depreciation Expense = Depreciation expense of each month x 7 = $200 x 7 = $1,400