Ursula Tax Planning Service has the following plant assets: Communications equipment: Cost,$6,720 with useful life of 8 years; Furniture: Cost,$18,000 with useful life of 12 years; and Computer: Cost,$12,000 with useful life of 4 years.(Assume salvage value of all the assets to be zero.)Ursula's monthly depreciation expense calculated using the straight-line method is ________.

Question

Quizplus · Accepted Answer

To calculate depreciation expense using the straight-line method, we take the cost of the asset and divide it by the useful life. 
For communications equipment: 
Depreciation expense per year = $6,720/8 = $840
Depreciation expense per month = $840/12 = $70

For furniture: 
Depreciation expense per year = $18,000/12 = $1,500
Depreciation expense per month = $1,500/12 = $125

For computer: 
Depreciation expense per year = $12,000/4 = $3,000
Depreciation expense per month = $3,000/12 = $250

Total monthly depreciation expense = $70 + $125 + $250 = $445.

Therefore, the correct answer is D.

Ursula Tax Planning Service Has the Following Plant Assets: Communications