Question

A company purchased factory equipment on April 1, 2017, for $128,000. It is estimatedthat the equipment will have a $16,000 salvage value at the end of its 10-year useful life.Using the straight-line method of depreciation, the amount to be recorded asdepreciation expense at December 31, 2017, isa.$12,800.b.$11,200.c.$8,400.d.$9,600.

Answer 1

C : $8,400

Step-by-step explanation:

cost = purchase price minus salvage value= 128000-16000=112000

depreciation rate = 10 years = 10%

depreciation per year = cost x rate = 112000*10% = 11200

depreciation for the year 2017 = 9/12 * 11,200