Henry Tax Planning Service bought production equipment for $9600 on 1 January 2017.It has an estimated useful life of five years and zero residual value.Henry uses the straight-line method to calculate depreciation and records depreciation expense in the books at the end of every month.As of 30 June 2017,the book value of this equipment shown on Henry's balance sheet will be:

Question

Quizplus · Accepted Answer

The equipment depreciates by $1,920 per year ($9,600/5 years). By 30 June 2017, six months of depreciation have occurred, totaling $960 ($1,920/12 months * 6 months). The book value is $9,600 - $960 = $8,640.

Henry Tax Planning Service Bought Production Equipment for $9600 on 1