On October 1, 2018, Holt Company places a new asset into service. The cost of the asset is $120,000 with an estimated 5-year life and $30,000 salvage value at the end of its useful life. What is the depreciation expense for 2018 if Holt Company uses the straight-line method of depreciation?

Question

Quizplus · Accepted Answer

Depreciation expense = (Cost of asset - Salvage value) / Useful life= (120,000 - 30,000) / 5= $18,000 per yearFor 2018, depreciation expense = $18,000 * 3/12 = $4,500

On October 1, 2018, Holt Company Places a New Asset