Question

A company purchased factory equipment on April 1, 2014, for $96,000. It is estimated that the equipment will have a $12,000 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2014, is A) $9,600.B) $8,400. C) $6,300.D) $7,200.

Answer 1

Answer:

Depreciation for 9 month = $6,300

Explanation:

Given:

Cost of equipment = $96,000

Salvage value = $12,000

Use full life = 10 year

Total time in 1st year = 9 month

Find:

Depreciation for 9 month

Computation:

Depreciation = [(96,000-12,000)/10)]

Depreciation = 8,400

Depreciation for 9 month = 8,400 (9/12)

Depreciation for 9 month = $6,300