00:01
A machine was purchased at an original cost of 400 ,000 with a salvage value of 20 ,000.
00:11
The life of the machine is 8 ,000 hours.
00:18
In the first five years, 6 ,000 hours.
00:23
In the second year, so it's 8 ,000 hours in the first year and then 6 ,000 hours in the second year and then 8 ,000 hours in the third year.
00:43
So the machine is expected to last for 38 ,000 hours in a period of six years.
00:53
Find the depreciation at the end of the second year.
00:57
So for this question, to calculate the depreciation for each year using the straight line method, we need to find the annual depreciation expense.
01:05
So the annual depreciation is equal to the original cost minus the salvage value divided by the total useful life.
01:26
So in this case, the original cost is 400 ,000 salvage value is 20 ,000.
01:30
The total useful life is six years times 8 ,000 hours, which is 38 ,000...