On January 1, 2018, Jordan, Inc. acquired a machine for $ 1,000,000. The estimated useful life of the asset is five years. Residual value at the end of five years is estimated to be $ 60,000. Calculate the depreciation expense per year using the straightminusline method.

Annual depreciation=$188,000

Explanation:

Giving the following information:

Purchasing price= $1,000,000

Salvage value= $60,000

Useful life= 5 years

To calculate the depreciation expense under the straight-line method, we need to use the following formula:

Annual depreciation= (original cost - salvage value)/estimated life (years)

Annual depreciation= (1,000,000 - 60,000)/5

Annual depreciation=$188,000

income statement is prepared in order to show the profits and loss of a business. in order to prepare the income statement she should collect all the income and expenses of the product with the cost of production.