Question

On October 1, 2021, Holt Company places a new asset into service. The cost of the asset is $120,000 with an estimated 5-year life and $30,000 salvage value at the end of its useful life. What is the depreciation expense for 2021 if Holt Company uses the straight-line method of depreciation?

Answer 1

cost of asset	$        120,000
salvage value	$          30,000
	$          90,000
Life	5	years
Annual depreciation	$          18,000
so if you have bought the asset in october
and considering the year ends in december
depreciation for 2021 will be	4500
(18000*3/12 months)

straight line method dep =(cost-salvage value)/useful life