Autumn Resorts purchased guest room furniture on January 1,2017 for $120,000.The furniture has an estimated useful life of 10 years and no salvage value.What amount will appear on Autumn's income statement for depreciation expense for the year ending June 30,2018?

Question

Quizplus · Accepted Answer

Using the straight line depreciation method, the annual depreciation expense would be $12,000 ($120,000/10 years). As the year ended on June 30, 2018, Autumn Resorts would have used the furniture for 18 months (January 1, 2017 to June 30, 2018), meaning the depreciation expense for that period would be $12,000/10 * (18/12) = $1,800 per month * 6 months = $10,800. This amount would appear on Autumn's income statement as depreciation expense for the year ending June 30, 2018. Therefore, the best answer is D.

Autumn Resorts Purchased Guest Room Furniture on January 1,2017 for $120,000.The