An asset having a four-year service life and a salvage value of $6,000 was acquired for $50,000 cash on April 5. Using straight-line depreciation, what will be the depreciation expense at the end of the first year, December 31?

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Business

Rayne

31 January, 07:03

An asset having a four-year service life and a salvage value of $6,000 was acquired for $50,000 cash on April 5. Using straight-line depreciation, what will be the depreciation expense at the end of the first year, December 31?

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Frank Logan · Answer 1

the depreciation expense at the end of the first year, December 31 is $ 8,250

Explanation:

Straight line Method of Depreciation Charges the same amount of depreciation over the useful life of the asset.

Depreciation Charge = (Cost - Salvage Value) / Useful Life

Depreciation Charge = ($50,000-$6,000) / 4 years

= $11,000

Apportionment of Depreciation Charge

From April 5 to December 13 there are 9 months

Therefore depreciation for the year is apportioned as follows:

Depreciation Charge = 9/12 * $11,000

= $ 8,250