On October 1, 2014, 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 residual value at the end of its useful life. What is the depreciation expense for 2014 if Holt Company uses the straight-line method of depreciation?

Question

Quizplus · Accepted Answer

Depreciation expense = (Cost - Residual value) / Useful life= (120,000 - 30,000) / 5= $18,000 per yearDepreciation expense for 2014 = $18,000 * (3/12) = $4,500

On October 1, 2014, Holt Company Places a New Asset