Use the information below to answer questions .On January 1/2005, a machine was bought for ₦56,000 to last for five years with a residual value of ₦1000.Cal...

Use the information below to answer questions .On January 1/2005, a machine was bought for ₦56,000 to last for five years with a residual value of ₦1000.Calculate the yearly depreciation expense using the straight line method.

Answer Details

The yearly depreciation expense using the straight-line method is ₦11,000. To calculate this, you would start by subtracting the residual value (₦1000) from the initial cost (₦56,000) to get the total depreciation (₦55,000). Then, you divide the total depreciation by the useful life of the machine (5 years) to get the yearly depreciation expense, which is ₦11,000. This means that each year for the next five years, the value of the machine will decrease by ₦11,000 until it reaches its residual value of ₦1,000 at the end of its useful life.