DeLito Tax Planning Service bought production equipment for $11,400 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

A)Straight-line depreciation = (Cost - Residual value)/ Useful life
Straight-line depreciation = ($11,400 - 0)/ 5 years = $2,280 per year 11ea8a42_4f1f_f3f7_8b44_3fd149d4ede2_TB5024_00 11ea8a42_4f1f_f3f8_8b44_49ce03685f38_TB5024_00 Book value of equipment = $11,400 - $1,140 = $10,260

DeLito Tax Planning Service Bought Production Equipment for $11,400 on January