Blair Resorts purchased guest room furniture on January 1,2013 for $120,000.The furniture has an estimated useful life of ten years.What amount will appear on Blair's income statement for depreciation expense for the year ending June 30,2014?

Question

Quizplus · Accepted Answer

Straight-line depreciation is calculated by dividing the cost of the asset by its useful life. In this case, the annual depreciation expense would be $12,000 ($120,000 divided by 10 years). Since the question asks for depreciation expense for the year ending June 30, 2014, this would be the first half of the useful life of the asset, or 1/2 of the annual expense, which is $6,000. Therefore, the correct answer is (D) $12,000.

Blair Resorts Purchased Guest Room Furniture on January 1,2013 for $120,000.The