Answered

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A company purchased new furniture at a cost of $29,000 on September 30. The furniture is estimated to have a useful life of 5 years and a salvage value of $3,500. The company uses the straight-line method of depreciation. How much depreciation expense will be recorded for the furniture for the first year ended December 31

Sagot :

abiolataiwo2015

Answer:

$797

Explanation:

Calculation to determine How much depreciation expense will be recorded for the furniture for the first year ended December 31

Cost of asset (furniture) = $29,000 on September 30

Salvage value = $3,500

Useful life of asset = 8 years

Under straight-line method:

Depreciation expense (Annual) = [Cost of asset - Salvage value] / Useful life of asset

Depreciation expense (Annual) = [$29,000 - $3,500] / 8 years

Depreciation expense (Annual) =$25,500/8 years

Depreciation expense (Annual) = $3,188

So, Annual depreciation on asset = $3,188

Depreciation expense for asset from September 30 to December 31 (i.e. 3 months):

Depreciation expense= Annual depreciation expense * (3/12 months)

Depreciation expense= $3,188 * (3/12 months)

Depreciation expense= $797

Therefore the amount of depreciation expense that will be recorded for the furniture for the first year ended December 31 is $797

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