Sure, I'd be happy to help you calculate the annual depreciation of a machine using the straight-line method. Here is the step-by-step solution:
1. Determine the initial cost of the machine:
The initial cost of the machine is given as [tex]$26,600.
2. Determine the salvage value of the machine:
The salvage value, which is the estimated residual value of the machine at the end of its useful life, is given as $[/tex]600.
3. Determine the useful life of the machine:
The useful life of the machine is given as 5 years.
4. Calculate the total depreciable amount:
The total depreciable amount is the difference between the initial cost and the salvage value. So, we subtract the salvage value from the initial cost:
[tex]\[
\text{Depreciable Amount} = 26,600 - 600 = 26,000
\][/tex]
5. Calculate the annual depreciation using the straight-line method:
The straight-line method of depreciation distributes the depreciable amount evenly over the useful life of the asset. To find the annual depreciation, we divide the depreciable amount by the number of years of useful life:
[tex]\[
\text{Annual Depreciation} = \frac{\text{Depreciable Amount}}{\text{Useful Life}} = \frac{26,000}{5}
\][/tex]
Thus:
[tex]\[
\text{Annual Depreciation} = 5,200
\][/tex]
So, the annual depreciation for the machine using the straight-line method is $5,200.
