A company purchased factory equipment on April 1, 2019, for $48,000. It is estimated that the equipment will have a $6,000 residual value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at 31 December, 2019, is:
A) $4,800.
B) $3,150.
C) $4,200.
D) $3,600.

Question

Quizplus · Accepted Answer

Depreciation expense per year = (48,000 - 6,000)/10 = $4,200. April 1 to December 31 = 9 months, therefore depreciation expense to December 31, 2019 = (4,200/12) x 9 = $3,150.

A Company Purchased Factory Equipment on April 1, 2019, for $48,000