Wizard Co. purchased two machines for $250,000 each on January 2. The machines were put into use immediately. Machine A has a useful life of 5 years and can be used in only one research project. Machine B will be used for 2 years on a research and development project and then used by the production division for an additional 8 years. Wizard uses the straight-line method of depreciation. What amount should Wizard include in research and development expense for the year?

$75,000

Explanation:

Depreciation is a systematic allocation of the cost of an asset over the useful life period . It is done in two major ways namely straight line or reducing balance method.

The first machine with useful life of 5 years with no scrap value will have an annual depreciation charge of ($250,000/5) = $50,000 charged to the research and expenses .

In the case of the second machine , the useful life is (2+8) years which is 10 years. Therefore the annual depreciation charge will be ($250,000/10) $25,000.

A total depreciation amount of $75,000 should be included in the research and development expenses for the year

one of the disadvantages of getting a government sponsored mortgage is they put a limit on the purchase price of the house. because the government is in charge of the mortage loan and terms, they are able to control how much money they are allowing someone to take out for the loan. not only are they incontrol, it's a lengthy process for a government sponsored mortgage.

borrow money from the government then pay the government back 5k