Question

On September 15, 2019, a computer was purchased with a 2-year useful life for $3,000, and a salvage value of $300.

Knowing that the depreciation expense for 2020 is $1,350, the amount of depreciation expense for 2019 and 2021 under the nearest fraction of a year policy, using the straight-line method is

Select one:

a. 2019 $450 and 2020 $900

b. 2019 $394 and 2020 $956

c. 2019 $338 and 2020 $1,012

d. 2019 $675 and 2020 $675

Answer 1

Depreciation is a normal wear and tear of an asset.

There are various methods of depreciation like straight line, double declinning etc

straight line depreciation = cost-salvage/number of years

Fraction of year for year 2019 =3.5 months/ months [15.09.2019-31.12.2019]

Fraction for year 2021 =8.5/12months [01.01.2021-15.09.2021]

year 2019 = [($3000-300)/2 ]* (3.5/12)

=$394

Year 2021 =($3,000-300)/2 *(8.5/12)

$956

Answer B)

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