On October 1, Year 1, Best Buy purchased an asset for $10,000, with a $2,000 estimated salvage value, and a 5-year useful life. How much is the year 1 depreciation expense using the straight-line method? Group of answer choices $525
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Ответ:
The amount of depreciation expense for the year is $400
Explanation:
The amount of depreciation expense for the year using the Straight Line Method (SLM) as:
Depreciation expense = Asset cost - Salvage value / Number of years of useful life × Portion of year that will be expensed
where
Assets cost is $10,000
Salvage value is $2,000
Number of years of useful life is 5 years
Portion of year that will be expensed is 3 months / 12 (For 3 months from October to December)
Putting the values above:
Depreciation expense = $10,000 - $2,000 / 5 × 3/12
= $8,000 / 5 × 3/12
= $1,600 × 3/12
= $400
Therefore, the amount of depreciation expense for the year using the Straight Line Method (SLM) amounts to $400
Ответ:
A hope this helps you :)
Explanation: