Question

Smart Touch Learning purchases office equipment on December 1 for $54,000. The useful life of the furniture is 10 years and there is no residual value. What is the depreciation expense per month for the furniture?

a) $5,400
b) $4,500
c) $540
d) $450

Answer 1

The monthly depreciation expense for the purchased office equipment with a cost of $54,000 over a useful life of 10 years and no residual value is $450.

Step-by-step explanation:

To calculate the depreciation expense per month for the furniture purchased by Smart Touch Learning, we use the straight-line method of depreciation. The total cost of the furniture is $54,000, with a useful life of 10 years, and no residual value. The annual depreciation expense is then the cost divided by the useful life. Therefore, the annual depreciation would be $54,000 ÷ 10 = $5,400 per year. To find the monthly depreciation expense, divide the annual depreciation by 12 months.

$5,400 ÷ 12 = $450 per month.

Therefore, the correct answer is (d) $450.