On October 1, Organic Farming purchases wind turbines for $140,000. The wind turbines are expected to last

Question:

On October 1, Organic Farming purchases wind turbines for $140,000. The wind turbines are expected to last six years,have a salvage value of $20,000, and be depreciated using the straight line method.

1. Compute depreciation expense for the last three months of the first year.

2. Compute depreciation expense for the second year.

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...

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