DeLito Tax Planning Service bought production equipment for $10,200 on January 1,2017.It has an estimated useful life of five years and zero residual value.DeLito uses the straight-line method to calculate depreciation and records depreciation expense in the books at the end of every month.As of June 30,2017,the book value of this equipment shown on its balance sheet will be ________.

Question

Quizplus · Accepted Answer

Straight-line depreciation = (Cost - Residual value)/ Useful life
Straight-line depreciation = ($10,200 - 0)/ 5 years = $2,040 per year
 11ea86d6_8262_60cf_92b6_dd67a8a01033_TB2804_00 11ea86d6_8262_60d0_92b6_433821ab8d3f_TB2804_00 Book value of equipment = $10,200 - $1,020 = $9,180

DeLito Tax Planning Service Bought Production Equipment for $10,200 on January