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• What is depreciation and the method?
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Answer Posted / shashi sharma
Straight line depreciation]
On April 1, 2011, Company A purchased an equipment at
the cost of $140,000. This equipment is estimated to have 5
year useful life. At the end of the 5th year, the salvage
value (residual value) will be $20,000. Company A
recognizes depreciation to the nearest whole month.
Calculate the depreciation expenses for 2011, 2012 and 2013
using straight line depreciation method.
Depreciation for 2011
= ($140,000 - $20,000) x 1/5 x 9/12 = $18,000
Depreciation for 2012
= ($140,000 - $20,000) x 1/5 x 12/12 = $24,000
Depreciation for 2013
= ($140,000 - $20,000) x 1/5 x 12/12 = $24,000
| Is This Answer Correct ? | 11 Yes | 3 No |
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