Marjorie, Inc. acquired a machine for $320,000 on August 31, 2003. The machine has a five-year life, a $50,000 salvage value, and was depreciated using the straight-line method. On May 31, 2006, a test for recoverability reveals that the expected net future undiscounted cash inflows related to the continued use and eventual disposal of the machine total $150,000. The machine’s actual fair value on May 31, 2006, is $135,000, with no salvage value. Assuming a loss on impairment is recognized May 31, 2006, what is Marjorie’s depreciation expense for June 2006?
- $6,352
- $5,000
- $4,500
- $3,148