Hudson Landscaping Service bought equipment for $10,800 on January 1,2019.It has an estimated useful life of five years and zero residual value.Hudson uses the straight-line method to calculate depreciation and records depreciation expense in the books at the end of every month.As of June 30,2019,the book value of this equipment shown on its balance sheet will be ________.
A) $9,720
B) $10,800
C) $11,880
D) $10,980

Question

Quizplus · Accepted Answer

A) Straight-line depreciation = (Cost - Residual value) / Useful life
Straight-line depreciation = ($10,800 - 0) / 5 years = $2,160 per year 11ea8873_d44f_d643_bb89_6177e0e6ba0f_TB5026_00 11ea8873_d44f_d644_bb89_b57172789a67_TB5026_00 Book value of equipment = $10,800 - $1,080 = $9,720

Hudson Landscaping Service Bought Equipment for $10,800 on January 1,2019