Ursula Tax Planning Service has the following plant assets: Communications equipment: Cost,$3840 with useful life of 8 years;Furniture: Cost,$17,280 with useful life of 12 years;and Computer: Cost,$13,440 with useful life of 4 years.Assume the salvage value of all the assets is zero and the straight-line method is used. Ursula's monthly depreciation journal entry will include a:

Question

Quizplus · Accepted Answer

To calculate the monthly depreciation for each asset, we need to divide the cost of each asset by its useful life in months.

Communications equipment:
Monthly depreciation = $3840/96 months = $40 per month

Furniture:
Monthly depreciation = $17,280/144 months = $120 per month

Computer:
Monthly depreciation = $13,440/48 months = $280 per month

Therefore, the total monthly depreciation expense is $440 ($40 + $120 + $280).

Since Ursula is using the straight-line method, the same amount of depreciation expense will be recorded each month. The journal entry to record the monthly depreciation would be:

Depreciation expense   $440
     Accumulated depreciation   $440

So, the correct answer is B, which represents a credit to Accumulated depreciation of $440.

Ursula Tax Planning Service Has the Following Plant Assets: Communications