Ursula Tax Planning Service has the following plant assets: Communications equipment: Cost,$7120 with useful life of eight years;Furniture: Cost,$24,000 with useful life of 12 years;and Computer: Cost,$13,600 with useful life of four years. Ursula's monthly depreciation expense calculated using the straight-line method is: (Assume salvage value of all the assets to be zero)
A)$74
B)$283
C)$524
D)$167

Question

Quizplus · Accepted Answer

To calculate monthly depreciation using the straight-line method, divide the cost of each asset by its useful life in months, then sum the results: Communications equipment: $7120 / (8*12) = $74; Furniture: $24000 / (12*12) = $167; Computer: $13600 / (4*12) = $283. Total monthly depreciation = $74 + $167 + $283 = $524.

Ursula Tax Planning Service Has the Following Plant Assets: Communications