Question

On January 1, 2014, Mudhoney Inc. purchased equipment for $45,000. The company is depreciating the equipment at the rate of $750 per month. At January 31, 2015, the balance in Accumulated Depreciation is

Answer 1

Answer:

$9,750

Explanation:

The computation of the balance in the Accumulated Depreciation is shown below:

For the year 2014, the month should be calculated from January 1 to December 31 i.e.  12 months

For the year 2015, the month should be calculated from January 1 - 31st = i.e. 1 month

Total there is  13 months

So, the balance would be

= $750 × 13 months

= $9,750