On April 1, 2014, Cyclone's Backhoe Co. purchases a trencher for $360,000. The machine is expected to last six years and have a salvage value of $36,000.
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Compute depreciation expense for both years ending December 2014 and 2015 assuming the company uses the straight-line method.
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| Straight-line depreciation for 2014 |
| [($360,000 – $36,000) / 6 years] × 9 / 12 = $40,500 |
| Straight-line depreciation for 2015 |
| ($360,000 – $36,000) / 6 years = $54,000 |
