Question

Shop –N-Go Systems purchased cash registers on April 1 for $6,000. If this asset has an estimated useful life of four years, what is the netbook value of the cash registers on May 31 if the company uses the straight-line method of depreciation?

Answer 1

Depreciation= $250

Step-by-step explanation:

Giving the following information:

Purchasing price= $6,000

Useful life= 4 years

Depreciation= straight-line

First, we need to calculate the annual depreciation:

Annual depreciation= (original cost - salvage value)/estimated life (years)

Annual depreciation= 6,000/4= 1,500

Now, the depreciation for two months:

Depreciation= (1,500/12)*2

Depreciation= $250