Mohr company purchases a machine at the beginning of the year at a cost of $40,000. the machine is depreciated using the straight-line method. the machine's useful life is estimated to be 8 years with a $9,000 salvage value. depreciation expense in year 2 is:

$3,000 is the depreciation expense in year 2.

Further explanation:

Depreciation expense:

Depreciation expense refers to the fall in the value of an asset. There are three types of depreciation method which are:

1.Straight-line method

2.Diminishing method

3.Units of production method

Calculation of the depreciation expense in year 2:

Depreciation expense:

Working note 1:

Calculate the value of depreciation rate:

Thus, $3,000 is the depreciation expense in year 2.

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Answer details:

Grade: High School

Subject: Accounting

Chapter: Depreciation

Keywords: Mohr company purchases a machine at the beginning of the year at a cost of $24,000. the machine is depreciated using the units-of-production method. the company estimates it will use the machine for 5 years, during which time it anticipates producing 40,000 units. the machine is estimated to have a $4,000 salvage value. the company produces 9,000 units in year 1 and 6,000 units in year 2. depreciation expense in year 2 is, fall amount, asset, straight-line method, diminishing method, units-of-production method, asset, depreciation method, three types.