Question

Use the information below to answer the questions that follow. Enter your answers using digits only...

Use the information below to answer the questions that follow. Enter your answers using digits only - no dollar signs, commas, or decimal points. The business's year-end is December 31. Cost of equipment = 269000 Useful life in years = 8 Residual value = 5000 Date purchased = November 1 What is the depreciation expense per year and what about the depreciation expense per month? and the depreciation expense in the year of purchase?

Homework Answers

Answer #1

Given:

Cost of equipment = 269000

Useful life in years = 8

Residual value = 5000

Date purchased = November 1

(a) Depreciation expense per year = (Cost - Residual value) / Useful life = (269000 - 5000) / 8 = $33,000

Depreciation expense per year = $33,000

(b) Depreciation expense per month = 33000 / 12 = $2,750

Depreciation expense per month = $2,750

(c) Period from date of purchase to end of business year = 2 months

Depreciation expense in the year of purchase = 2750 * 2 = $5.500

Depreciation expense in the year of purchase = $5.500

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